Super typhoon Meranti has medium-high insured loss potential: Aon Benfield

Reinsurance broker Aon Benfield’s risk modelling unit Impact Forecasting says that super typhoon Meranti, which is tracking towards China with winds of an estimated , has medium to high insured loss potential.

Super typhoon Meranti is a large and dangerous storm, with winds estimated around the 180mph mark and gusts estimated at well over 200mph. Meranti is currently tracking just south of Taiwan, a lucky escape for the island which avoided a direct hit from this typhoon.

Super typhoon Meranti forecast path and track

On its current path, super typhoon Meranti is anticipated to strike mainland China in Zhangpu County, Fujian Province, on Thursday morning local time. Weakening is expected as the storm nears China, but still Meranti could cause a significant economic loss and a medium to high insurance industry loss, according to reinsurance broker Aon Benfield.

At landfall, Meranti could still be a strong category 3 level typhoon, with the potential to cause significant damage. Additionally rains are expected to be torrential and flooding a risk for China.

While insurance penetration is growing in China it still remains woeful. With the majority of risk held by local insurers and government, any reinsurance sector impact is likely to be limited. However Aon Benfield does say this typhoon has the potential for a medium to high insurance sector loss, although that is likely relative to penetration.

The economic cost however will likely be high, as seen with other recent typhoons to strike China, where insurance coverage of the losses has been significantly lower than insured.

Update: Typhoon Meranti has now weakened somewhat, but is still forecast to make landfall in China as a strong Category 3 typhoon.

Impact Forecasting’s latest update at 16:00BST, 11:00ET:

LATEST DETAILS ON TYPHOON MERANTI

COORDINATES: 23.9° north, 118.8° east (previous location: 21.6° north, 120.7° east)
LOCATION: 325 kilometers (200 miles) west-southwest of Taipei, Taiwan
MOVEMENT: northwest at 22 kph (14 mph) (previous: northwest at 24 kph (15 mph))
WINDS: 230 kph (145 mph) with gusts to 280 kph (170 mph) (previous: 285 kph (180 mph))
RADIUS OF TROPICAL STORM-FORCE WINDS: 370 kilometers (230 miles)
RADIUS OF HURRICANE-FORCE WINDS: 110 kilometers (70 miles)
MINIMUM CENTRAL PRESSURE: 931 millibars (previous: 900 millibars)
SAFFIR-SIMPSON SCALE RANKING*: Category 4

LANDFALL AND LOSS PROBABILITIES

FORECAST LANDFALL LOCATION: near Shantou, Guangdong Province, China
FORECAST LANDFALL TIMEFRAME: early Thursday morning local time
24-HOUR SIGNIFICANT LOCAL INSURED LOSS POTENTIAL: MEDIUM-HIGH

DISCUSSION

Typhoon Meranti, located approximately 325 kilometers (200 miles) west-southwest of Taipei, Taiwan, is currently tracking northwest at 22 kph (14 mph). Satellite imagery today shows that the cyclone has started to show signs of major weakening as the deep central convection near the low-level circulation center has eroded. The well-defined eye that was prevalent previously has eroded as the storm interacted with the mountainous terrain of Taiwan and underwent an eyewall replacement cycle. The JTWC has set initial position based on a composite radar loop from Taiwan’s Central Weather Bureau. The initial intensity remains a bit uncertain. The JTWC notes that Dvorak estimates have a fairly wide range, but it is clear that significant weakening has occurred from Meranti’s peak. The agency has set the current intensity at 230 kph (145 mph), but that may be generous. Upper level atmospheric analysis indicates that the system has drifted into an area of moderate to strong vertical wind shear, which is also allowing for more weakening. The cyclone is under the steering influence of a ridge of high pressure located to the northeast.

Meranti will track generally northwestward throughout the rest of its lifespan under the steering influence of the previously mentioned steering ridge. With the combination of vertical wind shear and land interaction, a rapid weakening is forecast up until the landfall point in eastern China. Landfall is anticipated within the next six hours near Shantou in Guangdong Province. The rugged terrain and strong wind shear will rapidly erode the system after coming ashore. Most forecast models dissipate Meranti within 36 hours. Given strong forecast model consistency, there is high confidence in the JTWC track.

An earlier update from Impact Forecasting:

LATEST DETAILS ON SUPER TYPHOON MERANTI

COORDINATES: 21.6° north, 120.7° east (previous location: 19.6° north, 125.5° east)
LOCATION: 400 kilometers (245 miles) south-southwest of Taipei, Taiwan
MOVEMENT: northwest at 24 kph (15 mph) (previous: west-northwest at 22 kph (14 mph))
WINDS: 285 kph (180 mph) with gusts to 350 kph (220 mph) (previous: 295 kph (185 mph))
RADIUS OF TROPICAL STORM-FORCE WINDS: 400 kilometers (245 miles)
RADIUS OF HURRICANE-FORCE WINDS: 130 kilometers (80 miles)
MINIMUM CENTRAL PRESSURE: 900 millibars (previous: 898 millibars)
SAFFIR-SIMPSON SCALE RANKING*: Category 5

LANDFALL AND LOSS PROBABILITIES

FORECAST LANDFALL LOCATION: Zhangpu County, Fujian Province, China
FORECAST LANDFALL TIMEFRAME: Early Thursday morning, local time
24-HOUR SIGNIFICANT LOCAL INSURED LOSS POTENTIAL: MEDIUM-HIGH

DISCUSSION

Super Typhoon Meranti, located approximately 400 kilometers (245 miles) south-southwest of Taipei, Taiwan, is currently tracking northwest at 24 kph (15 mph). High resolution animated satellite imagery showed a northward wobble in the storm motion as the system approached Taiwan. Interaction with the southern tip of Taiwan created a temporary cloud-filled eye which has since started clearing again. Deep convective banding along the northern side of the system is pushing onshore near central Taiwan. A recent satellite image showed broad deep convection extending 185 kilometers (115 miles) to the south of the eye. It also continues to indicate that an eyewall replacement cycle is occurring however the outer convective ring has been disrupted by land interaction. The current position is based on the eye feature in satellite and the Taiwan radar with high confidence. The intensity has been reduced due to land interaction with southern Taiwan and is supported by Dvorak current intensity estimates from all agencies reporting to the JTWC. Super Typhoon Meranti remains in a very favorable environment with low vertical wind shear, strong radial outflow, and very warm sea surface temperatures. However, land interaction with Taiwan and the eyewall replacement cycle will offset the favorable environmental conditions. Meranti is under the steering influence of a ridge of high pressure located to the north.

Super Typhoon Meranti is forecast to continue on its overall northwestward track throughout the forecast period under the steering influence of the aforementioned high pressure ridge. However the eye feature is expected to move in a trochoidal fashion which will cause fluctuations in the storm track. The combined effects of increasing vertical wind shear, land interaction, and the eyewall replacement cycle will all serve to weaken the system as it approaches China. On Thursday morning (local time) Super Typhoon Meranti will make landfall in China as a strong typhoon. The rugged terrain and increased vertical wind shear will rapidly erode the system causing it to dissipate as a significant tropical cyclone over land by Friday morning (local time).