Twelve Capital Event Update – 9 September 2019

9 September 2019

Hurricane Dorian

Dorian has missed the mainland of North Carolina, having previously also avoided landfall in Florida. The eye of the storm briefly touched land near Cape Lookout as a category 1 hurricane on Friday 6 September, but did not make full landfall in any high value areas. The storm has in the meantime passed Nova Scotia, Canada and is expected to fully dissipate over open water in the next couple of days.

Given its close proximity to the US coastline for several days, Dorian will have probably still caused extensive damage from wind and storm surge across Florida, Georgia and the Carolinas. It is unlikely that these will cause major concerns for the ILS portfolios managed by Twelve Capital, based on current industry loss estimates:

– USD 1bn to USD 3.3bn with an estimated average loss of USD 1.5bn for losses caused in the US.

– USD 0.8bn to USD 4.5bn for insured losses in the Bahamas and a corresponding estimated average loss of USD 2.5bn.

It should be noted that in the Bahamas various sources indicate that the economic damage may be more than double the insured losses thereby reaching up to USD 8bn.

Typhoon Faxai

In Japan, Typhoon Faxai has made landfall as a category 3 according to the Joint Typhoon Warning Center (JTWC) with sustained winds of ca. 180 km/h near Chiba City (Prefecture of Chiba) just east of Tokyo, in the early hours of 5 a.m. Japan Standard Time, i.e. around 10 p.m. Sunday night Eastern European Time.

Typhoon Faxai caused power outages in the Tokyo region affecting more than one million people. Despite the strong winds with potential to cause a reasonable amount of damage, initial reports found in international news publications so far indicate moderate damage to property and cars from wind and flooding. Preliminary modelling figures indicate a wide range of possible outcomes, from very little damage (less than USD 200m insured losses) up to mid double digit USD bn insured market losses, with corresponding significant uncertainty about the ultimate impact.

Notably, Tokyo is a modern and largely well-constructed city with flood and surge protection infrastructure that reduces the vulnerability against storm surge and flood. However, it is currently too early to suggest a reliable view on the impact of this event on insured values. The storm system is currently moving back eastwards out to the sea where it is expected to weaken and dissolve over the next few days.

Twelve Capital continues to monitor closely the impact of this event and will issue corresponding updates as soon as more accurate and more reliable estimates about insured losses are available.

Please click on the link below for the track of Typhoon Faxai (source: Joint Typhoon Warning Center (JTWC)).

Track Typhoon Faxai

Other recent events
Typhoon Lingling

Typhoon Lingling has moved across South- and North Korea during the weekend. It made landfall on the island of Jeju as a category 1 hurricane on the Saffir-Simpson Wind scale and killed at least three people in South Korea. The damage in North Korea is unknown at this point, due to restrictions on media reporting. Overall, Twelve Capital does not expect this event to impact ILS portfolios.

Monday, 9 September 2019