MS&AD puts Hagibis & Faxai loss at $3.36bn, total across big-three $8bn

MS&AD Holdings, the Japanese parent to domestic insurance carriers Mitsui Sumitomo and Aioi Nissay Dowa Insurance, as well as its international operation MS Amlin, has revealed today that it expects its ultimate loss from typhoons Hagibis and Faxai will be approximately US $3.36 billion, before reinsurance recoveries.

The company has estimated that its final incurred losses for typhoon Faxai will reach JPY 135 billion, around US $1.24 billion, up significantly on the JPY 100 billion it had reported back in September.

The more recent and more impactful typhoon Hagibis is now estimated to have caused MS&AD companies an incurred loss of JPY 230 billion, roughly US $2.12 billion.

At this level, it seems MS&AD’s in-force 2018 Akibare Re catastrophe bond should be safe from potential losses caused by typhoon Hagibis, leaving the firms other reinsurance provisions to pick up the costs.

With both figures being revealed prior to the deduction of any reinsurance recoveries, it is safe to assume a significant proportion of the roughly US $3.36 billion will fall to international reinsurance carriers and the insurance-linked securities (ILS) marketplace.

Meanwhile, Sompo Japan Nipponkoa, parent to Sompo International, has confirmed its gross typhoon Faxai loss at JPY 112.4 billion, which is just over US $1.03 billion.

Combined, the big-three Japanese players, so including Tokio Marine, are expecting roughly $8 billion of claims from the impacts of both typhoons Faxai and Hagibis, it has now been reported in the press.

Typhoon Faxai is pegged at JPY 378.8 billion across the three firms, while Hagibis is put at JPY 490 billion, however there seems some mixing of gross and net here, as well as tax effects, meaning the actual gross impact across the insurers could be a little higher. MS&AD is the only company to clearly spell out is gross losses for both typhoons.

The total currently falls well below where industry loss estimates combined sit for these typhoons, as some have put the combined insurance market impact at between $20 billion and $25 billion.

The difference likely lies in international insurers, as well as any mixing of gross and net in the reported figures from the Japanese carriers.

Perhaps the most interesting factor in the figures is the 35% increase in the typhoon Faxai ultimate loss estimate from MS&AD Holdings and it will be interesting to see whether its Hagibis estimate inflates in a similar manner as time passes.