Turkey earthquake to cost insurers $3.4bn: Perils
The initial estimate from the loss aggregator includes property losses covered by the Turkish insurance market but does not include losses in Syria
The loss aggregator’s initial estimate is one of the highest for the catastrophe so far
Perils has estimated Turkey will face insured losses of Lira65.4bn ($3.4bn) for the series of earthquakes that hit the country and neighbouring Syria last month.
The initial estimate from the loss aggregator includes property losses covered by the Turkish insurance market but does not include losses in Syria.
It is one of the highest loss estimates for the catastrophe so far.
In comparison, in February – just weeks after the event – Verisk estimated insured losses would exceed $1bn, while Karen Clark & Co said the re/insurance industry faced around $2.4bn of losses.
Fitch Ratings estimated insured losses could be as low as $1bn because of the low insurance penetration in the region but could reach as much as $4bn.
The most recent figures from Turkish Catastrophe Insurance Pool show insurance penetration in the region most affected by February’s earthquake to be around 52%.
“Although the insurance industry in Turkey offers protection for the financial consequences of such events, the take-up rate remains low or the coverage limits purchased are far below reconstruction costs,” Luzi Hitz, chief executive of Perils, said.
The 7.8 magnitude earthquake struck south central Turkey, near the border with Syria, in the early hours of February 6. It was followed nine hours later by another 7.5 magnitude quake 95 km to the north.
Official figures report more than 56,900 deaths across Turkey and Syria, with close to 130,000 more people severely injured and an estimated 2.4 million people now living in tents and temporary shelters, Perils said.
In Turkey, official figures show more than 160,000 buildings containing 520,000 flats were destroyed, damaged or will need to be demolished, with Koç University estimating economic losses of between $70bn and $87bn.
Earlier loss estimates pointed to poor construction standards as one of the reasons the earthquake caused such a high level of property damage.
Perils said insured losses of Lira65.4bn would make it Turkey’s costliest catastrophe on record. The company will publish an updated estimate on May 6, three months after the event.
