Global reinsurance firm Munich Re has estimated the insurance industry loss from typhoon Jebi’s impacts in Japan at $6 billion, while less impactful typhoon Trami is estimated to have caused a $2 billion industry-wide impact.
Typhoon Jebi loss estimates started off low at up to $4.5 billion, which rose to up to $5.5 billion, but the impacts to Japanese domestic insurers and the sentiment among reinsurance and ILS fund interests quickly showed that the eventual toll would be higher.
The losses have been creeping up for both typhoon Jebi and Trami, resulting in some impacts to ILS funds in October, as they accounted for the rising loss estimates.
As we said in our article on these ILS fund impacts, the insurance sector has paid almost US $7 billion of claims, while the total global re/insurance industry loss from the two events looks destined to settle above $10 billion.
By Munich Re’s reckoning the combined industry loss is $8 billion, but our sources still suggest that typhoon Jebi will creep higher and many feel that $6 billion is still too low for this typhoon industry loss.
Munich Re puts the economic loss from typhoon Jebi at $8.5 billion, so almost 71% of this loss is thought to be covered by insurance and a significant chunk of this is expected to fall to reinsurance players.
The higher the industry impact from Jebi rises, the greater the share of losses that ILS and collateralized reinsurance markets are going to take from this catastrophe event and the bigger influence it will have on ILS fund returns.
In addition, Munich Re estimates that typhoon Mangkhut’s impacts on the Philippines, Hong Kong and mainland China cost $4.5 billion on an economic basis and the insured loss would be $1.3 billion.