Typhoon Hagibis, which made landfall in Japan last weekend, had devastating effects, primarily as a result of torrential rain and floodings. Just outside of downtown Tokyo, 600 mm of rain fell in 24 hours, and southwest of the city, 940 mm fell in the same period. In addition to the human suffering, the costs for insurance companies are estimated to reach 10 billion dollars. The claims settlement process is also expected to be complicated, as typhoon Hagibis occurred shortly after typhoon Faxai in September in the same region.
This said, no notable loss is expected on the cat bond market, though a couple of bonds with exposure to Japanese wind saw prices fall slightly before landfall. These bonds are expected to recover. The insured losses from Hagibis, in combination with the events in 2018, are however expected to contribute to continued demands for higher premiums in 2020 by the insurance companies.