No new natural catastrophe events took place over the last two weeks that would be expected to cause major insured industry losses.
As the peak Atlantic hurricane season 2019 begins, there have been several updates to forecasts of the number of named storms. The National Oceanic and Atmospheric Administration (NOAA) has slightly updated its May forecast to 10-17 named storms, 5-9 hurricanes and 2-4 major hurricanes (Category 3+) during the season. This takes into consideration the two named storms (Andrea and Barry) which have already occurred.
Other recent events
The following noteworthy natural events recently occurred during early August although, at present, either these events are not expected to have a significant impact on Twelve Capital’s portfolios, or insured loss estimates have not yet been issued.
This storm made landfall in Zhejiang province, China, more than 300 km south of Shanghai on 9 August as a category 2 typhoon with winds recorded of 175 km/h. In the province of Zhejiang, over a million people were evacuated. Several dozen people died or are still missing. Over 30’000 houses appear to have been damaged. Since making landfall, Lekima has been downgraded to a tropical storm moving north/north-eastwards in China. The risk of heavy rains, flood and landslides continues.
Initial estimates from various media sources indicated economic losses in range of USD 2.0-2.6 billion. As the event is still ongoing, these initial estimates should be taken with a corresponding degree of caution. Having said this, the so-called protection gap, i.e. the difference between the economic damage and the insured loss, is generally significant in China, so the actual insured loss from Typhoon Lekima is expected to be materially lower.
This category 1 typhoon made landfall in Japan on 5 August near Miyazaki. Typhoon Francisco has injured at least two people and caused significant travel disruptions, according to local media. Peak wind speeds of 142.6 km/h were reported in Miyazaki. Heavy rainfall and localised flooding in Japan as well as South Korea left people injured and disrupted local transport but no major damage to property has been reported so far.
A tornado damaged around 160 buildings in Luxembourg over the course of the weekend. Strong tornadoes are relatively rare in western Europe hence this event has received considerable media attention. Nevertheless, the economic damage and the impact on reinsurance contracts is likely to be minimal with no impact expected on ILS funds.
Monday, 12 August 2019