Insured losses from Typhoon Haiyan won’t surpass $100 million, catastrophe modeling firm EQECAT predicted Tuesday.
Noting that storm surge and the strong winds sustained by Haiyan as it moved across the Visayan Islands in the Philippines caused most of the damage from the event, EQECAT said that the Visayan Islands are relatively less urbanized and insurance penetration is low.
“A portion of the population carries property insurance and only about 15-20 percent of the property insurance policies are insured against typhoon risk in the Philippines, but this varies by the economic development of the region and population.”
“Also, typical insurance policies in the Philippines do not include flood coverage (flood following typhoon). Instead, it is covered under separate fire policies with named peril extension, or under property all risk contracts,” EQECAT said in a catastrophe analysis posted on its website.
“Although there is a probability of high value single facility insured loss, the aggregate the insured loss from this event is not expected to exceed $100 million,” the catastrophe modeling firm concluded.
According to EQECAT, Haiyan was the sixth named storm to make landfall in the Philippines this year. On average, roughly seven storms make landfall annually, EQECAT said, noting that very intense typhoons are not uncommon in the Philippines.
Still Haiyan, called Yolanda in the Philippines, is the strongest event to make landfall with wind speeds of about 190 mph. Typhoon Megi (2010), a Category 5 storm (roughly 180 mph) at landfall in northern Luzon, caused about $100 million, according to a report by Swiss Re sigma, EQECAT notes.
Reporting on Haiyan’s storm surge, EQECAT said that a surge of about 18 to 21 feet inundated the coastline near and to the north of where the eye of the storm crossed the coast.
Haiyan remained a Category 5 to 4 typhoon as it traversed across the Visayan Islands in the Philippines before exiting in the South China Sea, EQECAT said.
In addition to potentially being the deadliest storm to hit the Philippines, EQECAT said that much of the country’s infrastructure such as roads, bridges, airports, ports, is damaged or destroyed within the impacted regions, impeding help and aid to people affected by the storm.
About 90 percent of infrastructure is damaged within the impacted regions and this is typically not insured by commercial insurers, EQECAT said.