Typhoon Loss $500M to $1B, Modelers Say

Typhoon Fitow, which hit Japan last week, created insured losses from $500 million to as much as $1 billion, modelers estimated.

AIR Worldwide in Boston said losses would not exceed $1 billion, as did Oakland, Calif.-based Eqecat, which said its best estimate of the insured losses is around ?50 billion, or $500 million at current exchange rates.

The storm struck Kanagawa state, southwest of Tokyo, before dawn last Friday with pouring rain, gusts up to 92 miles per hour and maximum sustained winds of 86 mph.

Morning train service in and out of the capital was canceled, more than 200 flights were grounded and 80,000 people were left without power as the storm tracked just west of the Tokyo metropolitan region.

"Very early reports from Japan's Fire and Disaster Management Agency indicate that more than 300 homes were flooded and more than 100 homes damaged by wind," noted Peter Sousounis, senior research scientist at AIR. "It is still in the early aftermath of this event, however, and these numbers will undoubtedly rise."

Eqecat said uncertainties that are controlling the breadth of its loss estimate include:

o Relatively low wind speeds were expected through the area, and the level of expected winds produce primarily incidental damage. However, regional- or micro- gusts can significantly increase the damage estimates.

o The area affected is a large metropolitan area. At its closest approach to Tokyo (Tokyo was about 30 miles from the "center" of the storm) the maximum sustained winds still exceeded typhoon strength (sustained winds in excess of 65 knots or 75 mph.)

Its insured loss estimate, Eqecat said, correspond to "economic" damage estimates approximately double the insured loss estimates. The bulk of the losses are expected to be to householder insurance, the company said.