Twelve Capital Event Update – 28 October 2019

Last regular event update of the 2019 Atlantic hurricane season

Until the start of the hurricane season 2020, Twelve Capital will continue to issue event reports on an ad-hoc basis in the case of substantial news flow.

Update Typhoon Hagibis

As previously reported, Typhoon Hagibis made landfall on 12 October 2019 in Izu Peninsula, Japan, equivalent to a category 1 or a weak category 2 hurricane with sustained wind speeds of about 145km/h up to 155km/h. Hagibis caused severe flood and wind damage across various prefectures in the North-Eastern part of Japan. One of the most affected prefectures was Nagano.

Last week, AIR has released their industry loss estimates which range from USD 8-16bn, with slightly more than half of that figure due to inland flooding. According to AIR, the wide range in these loss figures reflects the uncertainty that is due to the complexity of this event.

Twelve Capital reiterates that it is too early to determine reliable estimates for the ultimate impact on portfolios. Whilst the firm believes that from a performance impact perspective, losses in any ILS portfolios will likely be minimal, there is a certain chance for collateral-trapping, which would negatively impact capacity at the upcoming renewals.

California wildfires

California continues to be impacted by several wildfires, facilitated by strong hot winds and by dry vegetation. As a precautionary measure, many utility companies have switched off power lines resulting in blackouts across the state. At this point, none of the current wildfires poses a significant threat to areas with high population density. Hence, Twelve Capital does not expect any impact on ILS portfolios at this time.

Other recent events

No other noteworthy events have occurred since last week.

Monday, 28 October 2019