Tag Archives: Japan

The 2015 Northwest Pacific Typhoon Season: Already a Record-Breaker

While the Atlantic hurricane season is expected to be below average this year, the North Pacific is smashing records. Fuelled by the strengthening El Niño conditions, the Accumulated Cyclone Energy (ACE)—used to determine how active a season is by measuring the number of storms, their duration and their intensity—continues to set unprecedented highs for the 2015 season.  According to Dr. Philip Klotzbach, a meteorologist at Colorado State University, the North Pacific ACE is 30% higher for this time of year than at any other time since 1971.

Philip J. Klotzbach, Colorado State University

To date, there have been 12 named Northwest Pacific storms, of which three have strengthened to Category 5 super-typhoon status, and two have strengthened to Category 4 typhoon. Typhoon Maysak was the first of the super-typhoons to develop and is reportedly the strongest known storm to develop so early in the season—it eventually passed over the northern Philippines in late March as a tropical depression. Super-Typhoons Noul and Dolphin followed in quick succession in May, with Noul scraping the northern tip of the Philippines, and Dolphin tracking directly in-between the islands of Guam and Rota.

China is recuperating after getting hit by Typhoons Linfa and Chan-Hom only days apart. Linfa made landfall on July 9, bringing strong winds and heavy rainfall to Hong Kong and southern China’s Guangdong province. Two days later, Chan-Hom brought tropical storm-force winds and heavy rainfall to Taiwan and the Japanese Ryukyu Islands before briefly making landfall as a weak Category 2 storm over the island of Zhujiajian in the Zhejiang province. Prior to landfall, Chan-Hom was anticipated to pass over Shanghai, but swung northeast and missed China’s largest city by 95 miles. Despite this near-miss, Chan-Hom still stands as one of the strongest typhoon to have passed within 100 miles of the city in the past 35 years.

Typhoon Nangka, the first typhoon to hit Japan this season, intensified to a Category 4 storm before ultimately making landfall as a Category 1 storm over the Kochi Prefecture on Shikoku Island, Japan. Although Nangka’s strength at landfall was weaker than originally forecast, the high level of moisture within the system caused significant rainfall accumulations, leading to widespread flooding and the threat of landslides. While there was an initial fear of storm surge in Osaka Bay, there has been limited damage reported.

This record-breaking season has been strongly influenced by the strengthening El Niño conditions, which can be characterised by several physical factors including warmer sea surface temperatures, a higher number of Category 3-5 typhoons, and a greater proportion of typhoons that follow recurring or northward tracks—all of which have been evident so far this year.

With El Niño conditions expected to continue intensifying the storms to come, this season highlights the necessity for a basin-wide multi-peril model, connected through an event-based approach and correlated geographically through a basin-wide track set. These will be featured in the new Japan typhoon model, due out next year, followed by the South Korea and Taiwan typhoon models. The RMS China typhoon models currently models typhoon wind, inland flood and surge for a correlated view of risk.

As El Niño conditions continue to bolster the Northwest Pacific typhoon season, RMS will be monitoring the situation closely. In September, RMS will be releasing a white paper on ENSO in the West Pacific that will provide further insight into its affects.

The Journey to Sendai and Beyond

Sendai is a city of a million people 2 hours north of Tokyo on the Shinkansen bullet train. From March 14-17, 2015 it will attract seven thousand people to the 3rd UN World Conference on Disaster Risk Reduction (WCDRR). Twelve heads of state (including one king and one emperor), seven prime ministers and 135 ministers and vice ministers, will be present to launch a fifteen year program of coordinated action around disaster risk reduction.

The conference is being hosted in Sendai because of the city’s recent experience of a mega-catastrophe. Just four years after the great Tohoku earthquake and tsunami in March 2011 and the coastal villages adjacent to Sendai still bear the scour marks where the great tsunami surged inland through the pine forests, removing many buildings off their foundations.

The original International Decade for Disaster Risk Reduction ran from 1990-1999. The second decade from 2005-2015, renewed at Kobe ten years after its devastating 1995 earthquake, was called the Hyogo Framework for Action. The continuation of this international program is currently designed to last for fifteen years. The fact that the frameworks have been renewed reflects reality—while there have been successes for particular regions and perils, the broader goals of worldwide disaster risk reduction have not been met. For example, the 2011 Tohoku earthquake was not anticipated, and as a result had grievous consequences in terms of loss of life and damage to the Fukushima nuclear power plants.

RMS will have four people at the Sendai WCDRR conference. We have obtained a coveted presentation on the main IGNITE stage—the equivalent to a “TED talk.” I will also be speaking on two panel sessions, one organized by The Geneva Association and Tokio Marine, “Insurance as contributors to problem solving and impact reduction,”and a second on the launch of the global set of catastrophe models developed by the UNISDR agency, for which RMS has provided high-level input. We have offered to host these worldwide UNISDR catastrophe models on RMS(one), which will open up access to the models for public officials in developing countries.

We have also worked on a couple of papers (for example, ‘Setting, Measuring and Monitoring: Targets for Disaster Risk Reduction: Recommendations for post-2015 international policy frameworks’) articulating how to measure progress in disaster risk reduction. At present, international frameworks have shied away from setting numerical commitments. We have argued that only probabilistic methods, which simulate thousands of possible events, can show baseline levels of risk, what actions will achieve progress, and whether targets have been achieved. We take Michael Bloomberg’s quote from the foreword to the Risky Business report: “if you can’t measure it, you can’t manage it.”

The work by the UNISDR on catastrophe modeling highlights the accelerated recognition of the role of modeling in managing and reducing disaster risk. There is now a real focus on public-private partnerships in achieving disaster reduction. With RMS’ rich and deep experience in catastrophe modeling, there is much we can offer to these expanded applications. For users of models in governments, public organisations and NGOs, models are required to:

  • explore how to manage a wide range of potential disasters
  • perform cost benefit analyses of alternative actions to reduce risk of loss of life or economic impacts
  • explore potential implications of climate change
  • explore holistically the potential for significant financial shocks to national economies

If you are attending the conference, come and visit us at our booth on the 6th floor of the Sendai International Center where we will be distributing information about our proposals for disaster risk modeling, and articulating our role as leaders in catastrophe risk modeling. It will be a highly publicized event with 500 journalists and around 300 private sector members, including several of our key clients. We will also be meeting with other organizations with which we are affiliated, including the UN Principles for Sustainable Insurance and the Rockefeller Foundation’s 100 Resilient Cities initiative.

We look forward to sharing more insight after the event.

How is the 2014 North West Pacific Typhoon Season Shaping Up?

July’s Typhoon Matmo was the 10th named typhoon of 2014 and the 5th to make landfall in the West Pacific basin. Typhoons can occur throughout the year, but the peak of the season is July through October, when nearly 70 percent of all typhoons develop, so we expect to see more activity in the region in the coming months.

Let’s take a look at recent activity and typhoon risk in China, the Philippines, Japan, and Taiwan.


To date, China has been impacted by three landfalling typhoons in 2014, the strongest of which was Rammasun, a Category 4 strength storm, with maximum sustained winds of 135 mph impacting Hainan and Guangdong provinces, and the autonomous region of Guangxi.

The southeastern coastal provinces of Guangdong, Fujian, and Zhejiang are most vulnerable to landfalling typhoons. They also represent some of China‘s most economically developed areas. Typhoon Rammasun impacted Guangdong province in July, bringing damaging wind and heavy rain. Overall in China, typhoon-induced flooding is the biggest driver of risk in high-exposure areas such as Guangdong, driving approximately 80 percent of the average annual losses from typhoon.

Insurance penetration is extremely low in China, varying by province. On average, about 15 percent of residential property risk is insured. Hainan, where Typhoon Rammasun first made landfall, has one of the lowest insurance penetrations in China, while Guangdong, one of the more prosperous provinces, is the second largest province for property insurance purchases with 41.7 billion Yuan ($6.8 billion) in direct premiums in 2012, according to the China Insurance Regulatory Commission.


Typhoon activity kicked off early this year in the Philippines with Tropical Storm Kajiki in January. More recently, the second storm to make landfall was Typhoon Rammasun, which hit Legaspi City in the Albay Province, south of the capital Manila, as a Category 3 storm. In a 36-hour period it brought 11.6 inches of rainfall, leading to flash flooding and landslides. The provinces impacted by Rammasun contain over $180 billion of insurable commercial and industrial building exposure, and over $215 billion of residential building exposure.

Like China, the Philippines lags behind some other markets in Asia in relation to insurance expenditure – non-life insurance penetration is 0.09 percent – though with higher proportionally for commercial and industrial businesses, which are centred around Manila and the industrial zones.


Tropical Storm Neoguri made landfall over the Kumamoto Prefecture on Kyushu Island in southwest Japan as the country’s first landfall this season. Neoguri brought strong winds, heavy rains, flooding, landslides, and mudslides to parts of southwest Japan. On Kyushu, the city of Ebino reported 13 inches of rain in the first 24 hours, and on Okinawa, heavy rainfall triggered flash flooding.

The southwestern parts of the country are the most vulnerable, particularly Shikoku, Kyushu, and San-in. Tokyo is rarely hit by typhoons and much of the coastline is protected from by the tsunami walls designed to protect from a four-meter storm surge.

Japan is the second largest non-life market in gross premium terms behind the U.S., and there is relatively high penetration of personal lines insurance, with over 50 percent of households buying building insurance. However, corporate Japan is massively under-insured compared to its western equivalents. Many large corporations only insure their property on an indemnity basis, while many small to medium-sized enterprises are completely uninsured.


So far this season, Taiwan has only been impacted by Typhoon Matmo, which passed through the center of the country as a Category 2 storm, bringing heavy rain and strong winds.

Storms typically travel towards the northwest from the Philippines, losing speed when they encounter the mountain chain running north-south down the center of Taiwan, and dropping most of their rain on the eastern side, causing rivers to overflow due to the extra water runoff from the mountains.

The most dangerous typhoons are those that approach from the south. The north-south mountain chain funnels them north up the Taiwan Straits so that they hit the western and northwestern parts of the island, including Taipei, where large industrial and commercial exposure is situated, such as the Hsin Chu Industrial Park in the province of Hsinchu which reportedly has a combined property/business interruption accumulation of $33.33 billion. However, insurers have reported few insured losses arising from wind damage alone, as the main damages are a result of flooding. Most of the losses caused by typhoons in Taiwan are agricultural, and thus uninsured. Insurance penetration is very low compared to some other markets in South East Asia in relation to insurance expenditure, with insurance penetration for non-life at 0.08 percent.

Building Better Models Through Collaboration

To calibrate and validate their models, catastrophe modeling firms ideally have access to large amounts of high-quality, high-resolution claims and exposure data. But the insurance industry has so much to offer than just data.

In addition to exposure data, insurance companies have detailed knowledge of the claims practice itself, the exact policy wording in the underlying exposure, and local expertise. In addition, many insurance companies today have highly experienced teams of scientists that evaluate vendor cat models, or build their own models in-house.

At RMS, our approach to building models has evolved in recent years to capture the insurance industry’s expertise and insight. At the start of a project, we strive to create partnerships with interested clients or companies to ensure we are aligned with market needs. These technical collaborations usually last for the duration of the model development process, and involve regular technical exchanges between RMS and partners to share methodologies and data sources. The exposure and claims data analysis becomes just one part of this broader initiative.

Over the past two years, we has been extremely fortunate to collaborate with two of Japan’s largest primary insurers, Tokio Marine and Sompo Japan, on the development of RMS’ earthquake and typhoon models for Japan.

Collaboration was in full force this June, when RMS’ typhoon modelers met with Hajime Sano, Head of Catastrophe Analytics, Sompo Japan, and his team in Tokyo for a day of technical discussions around hazard and vulnerability. The Sompo modeling team provided interesting ideas around open modeling features within the new model in order to better create their own view of risk.

Hajime Sano also joined us at our Exceedance conference in April as a featured guest speaker. At the event he explained why Sompo Japan develops in-house models, and why they decided to collaborate with RMS on the RMS Japan Typhoon Model update.

Tokio Marine in RMS London Office

At the end of June, Yuki Mizota from Tokio Marine Nichido Fire Insurance and Mizuki Shinohara from Tokio Marine & Nichido Risk Consulting visited our RMS London office. Yuki Mizota gave a very insightful presentation on the market conditions in Japan, and we had a number of productive discussions around exposure, hazard, and vulnerability.

Tour along Arakawa River

One highlight of the collaboration so far with Tokio Marine was a tour along the Arakawa river in Tokyo. During the visit we were able to see firsthand weak spots in the river defense system and witness the new super levees.

Such firsthand intelligence and data is vital in building a strong flood model. We conducted additional research leading to a much deeper understanding of the importance and state of the river defenses in Japan.

Partnerships with Tokio Marine and Sompo Japan

Our partnerships with Tokio Marine and Sompo Japan are great examples of what can be achieved when we work closely with clients to develop and update models. For us and our partners, this collaborative thinking is a win-win: the partner gains deeper insight into RMS modeling methodologies, a key element of their overall enterprise risk management, and RMS is able build better models based on the best science, the best data, and the additional expertise of local insurers. The industry as a whole benefits from state-of-the-art, well-calibrated models built collaboratively by some of the best minds across the insurance community.