Insured losses stemming from Typhoon Hagibis in Japan will hit between $7 billion and $11 billion, catastrophe modeling firm RMS is estimating.
While last month’s Typhoon Faxai was a wind-driven event, RMS estimates typhoon flooding from Hagibis contributes significantly to the overall losses in the event, approaching 60 percent of the total insured loss. RMS estimated the insured loss from Faxai to be between $5 billion to $9 billion.
Newark, Calif.-based RMS said its loss estimate from Typhoon Hagibis includes property damage and business interruption caused by typhoon wind and flood to residential, commercial, industrial, marine and automobile lines, and includes both the private and kyosai/mutual markets, said RMS.
Additional factors for post-event loss amplification and non-modeled losses include demand surge and claims inflation impacts associated with overlapping of areas impacted by the recent Typhoon Faxai as well as widespread damage to infrastructure.
The circumstances of this event — chiefly Typhoon Faxai hitting one month earlier and the ensuing widespread flooding — make Hagibis a complex event to model, explained RMS.
The industry loss estimate is informed based on analysis of the RMS reconstructed wind field and flood footprint using the RMS Japan Typhoon HD model. In addition, the estimate includes additional factors based on data and insights from field reconnaissance by RMS modelers.
Three RMS teams surveyed affected areas over two weeks to better understand this event. Field reconnaissance provides factual details about the geographical extent and severity of hazard and impact that cannot be ascertained readily through photographs of the damage circulated in the media.
*A version of this story ran previously in our sister publication Insurance Journal.