Typhoon Gaemi forecast to landfall in Taiwan with 140mph+ winds, impact Taipei

Typhoon Gaemi has intensified into a strong Category 4 equivalent storm with sustained winds of 140 mph and gusts to near 170 mph. The storm is expected to track close to the capital Taipei and will be one of the most intense to hit the eastern region of Taiwan in some years.

We’ve updated our original article, since Typhoon Gaemi is just approaching Taiwan with landfall expected in the next few hours.

Currently, typhoon Gaemi is the equivalent of a Category 4 hurricane, with sustained winds estimated around the 140 mph to 145 mph region, with gusts to 170 mph or a little higher at this time.

Some slight additional intensification is possible for typhoon Gaemi and the north and eastern region of Taiwan is in for potentially significant impacts from the storm over the coming hours.

The forecast no longer weakens Gaemi as significantly as was suggested, with the typhoon now expected to cross Taiwan and sustain winds of high Category 1 or category 2 strength, then head for China’s Fujian coastline to make a second landfall that could also be impactful.

Rainfall is as significant a concern as wind damage with typhoon Gaemi, with over one meter of rainfall forecast for the central and southern mountainous areas of Taiwan over the next 24 hours.

For China, the extreme rainfall levels are also a concern, given that country has been soaked in recent weeks and already experienced severe flooding.

The landfall region of Taiwan, currently anticipated to be Yilan County, is set for a very impactful hit from typhoon Gaemi, should it maintain its course and meet the current intensity forecasts.

Land interaction could be key to how impactful the storm is for Taipei, as the nearer to the capital it tracks the more its intensity might be maintained, forecasters are stating. The track is set to come very close and Taipei will experience strong hurricane force winds, it now seems.

Much of Taiwan’s semi-conductor industry is located a little further west and on the north coast of the country, but some of these fabs are nearer to Taipei and the capital itself has a higher penetration of insurance than other regions of the island.

While there aren’t any Taiwan typhoon exposed catastrophe bonds, there will be some insurance-linked securities (ILS) market capital exposed to a storm as intense as Gaemi.

More broadly, traditional reinsurance companies with concentrations of exposure around the Taipei and eastern end of Taiwan are likely to be most exposed to losses from the typhoon.

In addition, quota share reinsurance arrangements used by local insurers are also a source of potential loss leakage, to reinsurance companies and potentially also some ILS players.