Japan may face billion dollar losses from typhoon Jebi, Hokkaido quake

Share

Japan and its insurance industry may be facing billion of dollars of losses from the impacts of yesterday’s magnitude 6.7 earthquake in Hokkaido and recent typhoon Jebi, which was the strongest storm to hit the Japanese mainland in 25 years.

Japan imageJapan has been beset by weather and catastrophe losses in recent months, with the extreme rainfall in July, which it’s said could be up to a $4 billion industry loss, to extreme drought, as well as a number of typhoons and the June 18th Osaka floods. The flooding and Osaka floods have each led to over $1 billion of insurance payouts so far.

Insurance and reinsurance broker Aon’s Impact Forecasting unit said that it expects both the Hokkaido earthquake and typhoon Jebi will drive individually economic and insured losses that could reach into the hundreds of millions (USD).

So Japan may be facing another billion dollars of insurance loss, across the typhoon and earthquake, or more.

At this time it remains too preliminary to estimate the insurance and perhaps reinsurance impact from the Hokkaido earthquake, Aon’s team notes, but it said “the costs are expected to be significant.”

The USGS estimated a 33% chance that economic losses will exceed USD1 billion, for yesterday’s earthquake event.

It’s also too early for an accurate assessment of the re/insurance market loss from typhoon Jebi, but Impact Forecasting said, “Based on the anticipated scope of impacts, total economic and insured losses were minimally poised to reach into the hundreds of millions (USD) – if not higher.”

Business interruption costs are expected for both loss events, particularly given the impacts to industrial facilities and factories.

Impact Forecasting highlight a number of major facilities disrupted by yesterday’s earthquake event in Hokkaido:

– Toyota Motor Hokkaido Inc (Tomakomai)
– Mitsubishi Steel Muroran Inc (Muroran)
– Aisin Hokkaido Company (Tomakomai)
– Oji Holdings Corporation
– Nippon Paper Industries Company
– Kirin Brewery Company (Chitose)
– Asahi Breweries Limited (Sapporo)
– Calbee Group (Hokkaido)
– Sapporo Brewery Limited (Eniwa)
– Kirin Brewery Company (Chitose)

It’s easy to see how business interruption losses could escalate in this case, and when combining the two events (typhoon Jebi and the Hokkaido earthquake) it’s not hard to imagine that the ultimate economic and perhaps insurance industry loss across the pair will surpass a billion dollars.

Also read:

Hokkaido, Japan quake unlikely to hit any cat bonds: Plenum.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.

Read previous post:
Occam adds ex-Aon Capital Markets CEO Alan Punter as Non-Exec

Occam Underwriting, the specialty lines-focussed managing general agent (MGA) that was previously known as Sciemus, has appointed Dr Alan Punter,...

Close