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Oct 2019

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Asia: Typhoon Lekima spells $10bn economic loss in August

Source: Asia Insurance Review | Oct 2019

Typhoon Lekima is the deadliest and costliest storm of the 2019 western Pacific typhoon season after landing as a 110mph (175kph) Category 2 storm in China’s Zhejiang Province on 10 August, according to Aon.
 
Total economic losses in China were estimated to have approached CNY72bn ($10bn). Aon’s latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during August 2019, notes that at least 71 people were killed or missing in China following Lekima’s heavy rains, flooding, and gusty winds that affected nine provincial regions. Two people were killed in Taiwan during the passage of Lekima.
 
A damage assessment by the Chinese government revealed at least 149,000 homes and 1.1m ha of cropland damaged or destroyed. Aon’s Impact Forecasting team catastrophe analyst Michal Lorinc had been said, “The month of August further highlighted the severity of water-based impacts in populated areas. Typhoon Lekima’s torrential rains in China and continued seasonal monsoon rains across parts of Asia combined to cause more than $15bn in economic costs alone.
 
“The need to better understand the hydrological impacts in developed and emerging markets will become more important as vulnerabilities increase. Tools such as catastrophe modelling can help aid in developing new methods of hazard mapping and subsequent warning for future perils.”
 
Insured losses for typhoon Faxai expected to be $3-7bn
Catastrophe risk modeling firm AIR Worldwide forecasts industry insured losses from typhoon Faxai will be between JPY340bn ($3bn) and JPY740bn. The loss estimates include insured damage to property (residential, commercial, industrial and agricultural/mutual), both structures and their contents as well as automobiles from wind and storm surge.
 
AIR’s modeled insured loss estimates do not include:
  • Losses from precipitation-induced flood 
  • Landslide 
  • Losses to land 
  • Losses to infrastructure 
  • Losses to CAR/EAR, marine hull, or marine cargo lines of business 
  • Business interruption losses 
  • Loss adjustment expenses
  • Demand surge – the increase in costs of materials, services and labour due to increased demand following a catastrophic event 
 
The recent typhoon made landfall in Japan on 9 September in Yokosuka, a southern suburb of Tokyo, on the main island of Honshu at around 3am local time with 1-minute sustained wind speeds of 170kph. Subsequently, it crossed Tokyo Bay to strike Tokyo City with winds still equivalent to a strong Category 2 hurricane.
 
With the typhoon bringing damaging winds across south-eastern Honshu along with storm surge and heavy precipitation to coastal regions, impacts were reported across Chiba, Kanagawa and Shizuoka prefectures. High winds downed two electrical towers and multiple utility poles, leaving over 900,000 without power in the prefectures of Chiba, Ibaraki, Kanagawa, Shizuoka and Tokyo.
 
Storm surge was highest along the eastern shores of Tokyo Bay with JMA recording a storm surge of more than 1 metre in Mera, Chiba prefecture. Meanwhile, the city of Izu in Shizuoka prefecture experienced 17 inches of rain in 24 hours through early Monday, with recorded rates of more than four inches per hour. 
 
The typhoon also impacted crops in the region, ravaging rice fields and fruit farms just before harvest time. 
 
According to AIR, typhoon Faxai surpassed typhoon Higos for the strongest sustained wind speed at landfall in the region and tied with 1958’s typhoon Helen for the lowest recorded central pressure. 
 
The strength of the typhoon was comparable to typhoon Jebi, which devastated the southern Shikoku Island last year. Typhoon Jebi is established as Japan’s largest typhoon-related insurance and reinsurance loss on record with claims arising from the typhoon still being filed with over $8bn reported in insured claims. A 
 
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