Cost of Turkey quakes tops $5 billion
Catastrophe data group Perils has released its fourth cost estimate for last February’s earthquakes in Turkey, with insured property losses amounting to 117 billion lira ($5.84 billion).
The figure is a marked increase on Perils’ previous insured loss estimate of 92.8 billion lira ($4.68 billion) last August.
The sequence involved three significant earthquakes – between 6.7 magnitude and 7.8 magnitude – hitting south-central Turkey and neighbouring Syria within nine hours, killing about 62,000 people and causing nearly 2 trillion lira ($100 billion) in direct and indirect economic losses.
Perils says its total accounts for losses in the property line of business and does not include losses in Syria.
Despite earthquake insurance being legally required in Turkey, loose enforcement meant many affected areas had low coverage.
Perils Product Manager Luzi Hitz says insurance affordability is a challenge in many earthquake-prone countries.
“Take-up rates are often low, often driven by people’s conflicting financial priorities, affordability and a fatalistic attitude towards earthquakes,” he said. “These factors contribute to the significant protection gap often observed after large earthquake disasters.
“To facilitate the more widespread availability of earthquake insurance solutions, it is imperative that we elevate our understanding of the risk. In this sense, every disaster is also a chance to learn and improve, and this is where we hope our industry loss data can contribute.”
Perils says it will provide a fifth and final review in six months. It typically completes only four reviews but says the event’s unprecedented scale requires an additional analysis.