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Twelve Securis expects Kumamoto quake to have limited cat bond impact
The Zurich-based ILS manager also said the current European wildfire damage is expected to keep property (re)insurance and ILS losses limited, with several hundred homes destroyed in France's Gironde reported.
Twelve Securis said it does not expect any significant loss impact on the catastrophe bond market from the Kumamoto, Japan earthquake, a magnitude 6.8 event that struck Kyushu, Japan. The manager also said its preliminary review of private insurance-linked securities, or ILS, positions does not currently indicate a material impact.
In its event report, Twelve Securis pointed to PERILS AG’s industry loss estimate for the 2016 Kumamoto earthquakes of US $6.1 billion. It said Japan is highly seismically active and that since the 2011 Tohoku earthquake, five significant earthquakes with more than US $1 billion of insurance losses have affected Japan, while the current event is not expected to reach the Tohoku level.
Twelve Securis said it does not expect impacts anywhere near the Tohoku event, adding that the current quake is likely to rival many recent events, including the 2024 Noto earthquake. It added that insurance impacts in the billions of dollars are anticipated, but that it expects this to be limited for cat bond funds it manages, and that it will update if its initial assessments change.
The firm also commented on ongoing wildfires in Europe, particularly affecting France and Spain. It said direct destruction of property has remained relatively limited, with current reports of several hundred homes destroyed in Gironde, France, and it expects the direct property insurance impact to be limited, with ILS impacts expected to be minimal.