AIR Worldwide estimates insured losses from Super Typhoon Haiyan will range between $300 million and $ 700 million, the Boston-based catastrophe modeling firm said Sunday.
AIR also said that total damage to residential, commercial, and agricultural properties will range between $6.5 billion and $14.5 billion, noting the low level of insurance penetration in the region,
AIR’s loss estimates reflect:
- Insured physical damage to property (residential, commercial, and agricultural), for both structures and their contents due to wind and precipitation-induced flooding in the Philippines
- AIR’s assumed take-up rates—that is, the percentage of properties in the Philippines that are actually covered against wind and flood damage
- Current industry exposure for the Philippines
Loss estimates do not reflect:
- Losses to uninsured properties
- Losses to infrastructure
- Losses from storm surge
- Losses to crops
- Losses to auto
- Losses resulting from physical failure of flood defenses
- Losses from hazardous waste cleanup, vandalism or civil commotion whether directly or indirectly caused by the event
- Demand surge
- Business interruption
- Other nonmodeled losses
To produce loss estimates for Haiyan, AIR used track information from the Japan Meteorological Agency to model several different scenarios that reflect a range of radius of maximum wind values. AIR notes that the range in the modeled insured losses reflects uncertainty in the meteorological parameters associated with this event.
AIR also notes that a crucial component of providing an accurate insured loss estimate is ascertaining the storm’s exact strength at landfall. However, this is a challenging task, particularly for Haiyan, given that no known anemometers in the vicinity of landfall survived the storm.
Haiyan made landfall on the southern tip of Samar Island early morning local time on Nov. 8.
For the insured loss estimation, there is also uncertainty in the take-up rates (insurance penetration) for the Philippines, AIR notes.
According to Dr. Peter Sousounis, senior principal scientist, AIR Worldwide, the islands of Leyte, Samar, and northern Cebu are among the worst affected areas.
Sousounis also says that Tacloban City, the capital and biggest city (population of 220,000) of Leyte province was hit particularly hard by storm surge, where depths as high as 4 meters “destroyed every coastal home and left many inland neighborhoods inundated with floodwaters.”
Many inland residential and commercial buildings were also destroyed, and the tiny peninsula where the Tacloban airport was once located was leveled, leaving only the runway, AIR reports. With nearly every tree in the city either flattened or snapped in half, roads are blocked both in and around the city.
Guiuan, a municipality located very close to where the typhoon made landfall, is also in ruins, AIR says in Sunday’s media statement.
Source: AIR Worldwide