Tropical Storm Michael
Tropical storm Michael, currently located east of Yucatan, is forecast to make landfall in the Florida panhandle in the middle of this week as a category 2 hurricane. Michael has intensified over the past twenty-four hours and is expected to reach hurricane strength today or tomorrow. The Gulf of Mexico is currently exhibiting slightly above-average sea surface temperatures which makes further intensification possible.
Michael could, therefore, further develop into a category 3 hurricane at landfall. The current expected landfall location, somewhere between Panama City and Tallahassee (both in Florida), is less densely populated compared to the Miami area, but significant damage from wind, storm surge and rainfall is still possible irrespective of ultimate strength at landfall.
Given current forecast uncertainty, it is not yet possible to assess potential impact on ILS portfolios. However, should the current forecast materialise with Michael not intensifying any further beyond a category 2 at landfall, only minimal impact on insurance-linked securities’ (ILS) portfolios is expected.
Twelve Capital is closely monitoring the above situations and will issue more detailed updates should this event prove material, particularly regarding any potential impact on its portfolios.

Hurricane Florence
The assessment of insured losses is still ongoing. Estimates remain wide-ranging, demonstrating the uncertainty around quantifying the insured losses relating to Hurricane Florence. RMS estimates industry-insured losses from wind, surge and inland flood (including NFIP) to be USD 2.8-5bn. The first PCS loss estimate stands at USD 2.5bn, NFIP itself estimates their losses at USD 1-2bn. First loss information received from cedents, including the NFIP, indicate little to no impact for the Twelve Capital portfolios.

Other events
At the time of writing, the following natural events are ongoing or have recently occurred. At present, these events are not expected to have an impact on Twelve’s Portfolios:

Tropical Storm Kong-Rey
This storm tracked over East China Sea and the southern tip of Korea before dissipating in the Sea of Japan on 6 October.

Hurricane Sergio
Currently located in the Pacific Ocean, Sergio is forecast to make landfall on the coast of Baja California, Mexico as a tropical storm, and then track inland.

Typhoon Jebi
Jebi made landfall in Japan on September 4 as a category 3 storm.