AIR Worldwide has announced that Typhoon Melor which hit mainland Japan earlier this week could have resulted in a lot of insured losses. They estimate losses at somewhere between $850m and $1.5b onshore.
That’s a big number! There are catastrophe bonds which are still in effect which provide cover against Japanese typhoons. Swiss Re’s Vega Capital for instance from June 2008 is a three year deal, also Flagstones Valais Re from May 2008.
We’ll have to wait and see whether losses from this storm have been concentrated enough to actually trigger any of these bonds. It will very much depend on the trigger mechanisms used as the storm was not as powerful as it could have been having weakened before landfall. We’ll keep an eye on developments and let you know should anything come to light.
Read more about the loss estimates here.