Typhoon Nanmadol industry loss lifted close to US $1bn by PERILS

The insurance and reinsurance industry loss estimate for Japanese typhoon Nanmadol, which struck the country in September 2022, has now been lifted to close to US $1 billion by catastrophe loss data aggregator PERILS AG.

PERILS has pegged the insurance market loss from typhoon Nanmadol at JPY 129.6 billion, an increase of 8% from its last estimate of JPY 119.7 billion that was released in December 2022.

At today’s exchange rate, the updated loss estimate of JPY 129.6 billion for typhoon Nanmadol now puts the total at close to US $1 billion.

PERILS noted that its estimate is based on property losses falling to Japanese non-life insurers only and does not include losses sustained by the cooperatives insurance industry (Kyosai).

The estimate does not include losses from motor physical damage, a factor that is covered in many reinsurance and catastrophe bond arrangements, or goods covered by transportation-related policies.

Typhoon Nanmadol, known as Typhoon No. 14 in Japan, impacted the islands of Kyushu and Shikoku in southern Japan and the western and central regions of Japan’s main island of Honshu from 18th to 20th September 2022.

The General Insurance Association of Japan (GIAJ) had estimated the loss from typhoon Nanmadol at JPY 83.5 billion, based on data collected as of November 30th, around US $640 million as of today’s rate.

The majority of the losses from typhoon Nanmadol impacted the island of Kyushu, with 75% of the total industry loss falling to that region of Japan.

PERILS noted that the overall size of the industry loss was not exceptional for the Japanese non-life insurance industry, despite very strong wind gusts of up to 183km/h and rainfall of up to 904mm within a 72-hour period with Nanmadol.

As we reported at the time Nanmadol struck, insurance and reinsurance linked asset manager Twelve Capital warned that losses from typhoon Nanmadol would likely be sufficient to attach some higher-risk reinsurance layers, while fellow ILS manager Plenum Investments said the typhoon wasn’t severe enough to trouble catastrophe bonds.

Rating agency AM Best also said that reinsurance would buffer Japanese insurance carriers against losses from typhoon Nanmadol.

Takashi Goda, Senior Advisor for PERILS in Japan, commented, “This third loss report on Typhoon Nanmadol is an important milestone for the Japan non-life insurance industry. This is the first time that property LOB-level industry loss information per prefecture has been released for a typhoon event. Our ability to deliver such a detailed industry loss footprint has only been possible due to the strong support of the Japanese P&C insurance industry, for which we would like to thank them sincerely.”

Lukas Wissler, Product Manager at PERILS, added, “Our detailed Typhoon Nanmadol loss data can be applied to multiple use cases, including enabling the correlation analysis of maximum gust speed and damage degrees. This provides valuable insight into the vulnerability of insured property assets in Japan. In our view, there is clear value in being able to calibrate models with ground-truth data as it supports a more robust assessment of Japanese typhoon risk.”