typhoon Jebi 2018

The industry loss warranty (ILW) market is waiting nervously for confirmed estimates of industry losses to emerge for a number of recent catastrophe events around the globe, with certain trigger points on-watch and further ILW losses possible in the coming weeks.

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.

Many insurance-linked securities (ILS) funds have reported negative returns for the month of October 2018, as they take losses from hurricane Michael and also suffer after loss estimates increased for typhoons Jebi and Trami, driving the average ILS fund return to -0.81% for the month.

Typhoon Jebi has now officially become the largest Japan typhoon related insurance and reinsurance market loss on record, as the amount of insured claims paid for the storm have now reached almost $5.2 billion.

Markel CATCo Investment Management Ltd., the retrocessional reinsurance investment specialist, has set reserves for expected impacts from hurricane Michael and typhoon Jebi for its stock exchange listed CATCo Reinsurance Opportunities Fund, while also warning of exposure to the California wildfires and continued loss creep from 2017 events as well.

Typhoon Jebi’s impacts in Japan were always going to be a catastrophe loss event that would drive a modest amount of claims to some ILS funds and collateralised reinsurance vehicles, but with estimates rising for the industry impact, the expectation of ILS market losses is increasing as well.

Catastrophe risk modelling company RMS has put out an estimate of the insurance market loss from typhoon Jebi’s impacts in Japan, saying it could be as much as $5.5 billion and that figure doesn’t include everything.

Typhoon Jebi’s impacts on Japan are expected to result in a loss to the insurance industry of up to $4.5 billion by catastrophe risk modeller AIR Worldwide, an amount which has the potential to cause some impacts to reinsurance interests.

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.