Reported claims figures for the typhoons and extreme rainfall event that struck Japan last year have risen significantly, with the latest figures from the General Insurance Association of Japan (GIAJ) totalling over US $14.5 billion.
The insurance and reinsurance industry losses from these three Japanese events have escalated so far this year, particularly for typhoon Jebi, which is now expected to see its industry loss rise to around $15 billion, or perhaps a little more.
Typhoon Trami and the extreme rainfall that struck Japan in July 2018, have also seen a little loss creep, but it is the complications caused by these multiple rainfall and wind related events striking Japan over a short period of the summer months that has also served to exacerbate the loss situation.
The loss situation for typhoon Jebi has been particularly hard for the insurance, reinsurance and ILS fund industry, as coming last in these series of wind and water events, the fallout after Jebi was particularly difficult to attribute to the individual events, potentially inflating Jebi’s loss tally.
The GIAJ now puts typhoon Jebi’s claims paid total at almost 1.1 trillion Japanese Yen, equivalent to roughly US $9.9 billion.
That comes on the back of a huge 857,284 claims payments made, the majority of which fell to the Japanese property insurance class of Fire.
Typhoon Trami has now got a reported claims paid total of $2.83 billion, an increase on the previous figures as well and again with the majority falling to Fire policies.
The extreme rainfall that hit Japan in July is now reported to have resulted in over $1.8 billion of claims paid, again an increased figure since the last reports from the GIAJ back in March.
The overlapping of typhoons Jebi and Trami, as well as the fact they came after such a severe rainfall related flooding event, became an issue as insurers struggled to allocate losses to individual events.
Coming last, it’s assumed that Jebi bore the brunt of this issue, as well as the brunt of the demand surge related claims inflation that came due to the lack of contractors and availability of repairs.
As a result, typhoon Jebi’s industry loss is likely to settle around three times higher than the initial estimates from the leading catastrophe risk modelling firms and the expected market loss has doubled in around six months.
That’s a more significant loss creep than hurricane Irma, on a percentage basis, showing that it’s not just Florida where loss creep and claims inflation can be an issue when complex events strike (although of course for different reasons).
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