Taiwan braced itself as super typhoon hits

Taiwan braced itself as the super typhoon Gaemi hit today, as financial markets closed, flights were cancelled, and offices were shut, according to various news sources.

Gaemi, the first typhoon of the season made landfall on Taiwan’s northeast coast, with wind speeds of 145mph winds, a Category 4 storm in US terms.  

As a minimum, the airport will be closed, with no domestic or international travel in and out of Taiwan for 24 hours, which will be disruptive. This is the largest storm to hit Taiwan in 15 years, when typhoon Morokat, the fourth typhoon of the 2009 Pacific typhoon season, wrought catastrophic damage in Taiwan, killing 673 people and causing roughly NT$ 110 billion (US$3.3 billion) in damages.  

Warm Water Fuelling Storm 

As demonstrated by Morakot, strong winds are not the main issue, it is the rainfall that causes the damage. Storms approaching Taiwan from the Southeast track over a large swathe of deep warm water providing fuel for storms. The speed of this storm will also play a key part in the impact. Morakot, for example, slowed to less than 5knts, dropping a huge amount of rain over hillside regions. This 2024 storm has the potential to do the same.  

Gaemi has also undergone an ‘eye-wall replacement cycle’ which means that the area of storm winds is much larger than it was only 12 hours ago. This also caused the storm to stall a little, enabling it to gather more rain than it would have at its previous speed. A combination of these effects will likely result in this being close to, if not, the most impactful storm to hit Taiwan in recent times. 

Connected Risk for Businesses 

80 inches of rain has already been predicted so landslides could well be widespread if it heads somewhere close to the present storm track.  Almost all domestic flights and 201 international flights are cancelled. Rail operations will stop, but high-speed trains will still run. Over 2,000 people were evacuated from mountain areas due to landslide risks from heavy rain. 

Potential Multi-class Insurance Loss? 

In addition, one of the largest wind turbine parks in the world is situated in the bay to the Northwest of the island, which was not a consideration for the previous 2009 storm, because the turbines were not there then. So, this storm could cut across a wide spectrum of industry, causing a multi-class connected loss across the insurance sector’s aviation, marine, energy and casualty specialty classes. Another focal point will be the semi-conductor industry whose manufacturing bases are more concentrated further south, but other major warehouses could be impacted.