Insurable losses from Taiwan earthquake to be between $0.5-$1bn CoreLogic estimates

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CoreLogic estimates insurable losses from the 7.2 magnitude earthquake that hit Taiwan on April 3, 2024 will be between $0.5 and $1.0 billion (note, CoreLogic has reduced its figures from a range of $5bn-$8bn).

taiwan-quake-2024This is considered the largest quake to hit the country in the last 25 years. Having occurred at 7.58 am local time, it was followed by nearly 30 strong aftershocks, including a Mw 6.4 earthquake 13 minutes later.

According to CoreLogic’s model loss from this earthquake, losses include ground shaking and fire-following damage to only residential, commercial, industrial, and agricultural properties in Taiwan.

Estimated losses do not include any damage to government buildings and transportation infrastructure such as bridges or roads. Demand surge is included.

The insurable losses represent ground up damage and do not consider the application of policy deductibles or limits.

Additionally, the estimate does not exclude losses ceded to the Taiwan Residential Earthquake Insurance Fund, a non-profit organisation which operates as an earthquake insurance pool system designed to build consensus to strengthen the earthquake insurance mechanism.

The country has relatively high levels of insurance penetration, yet this catastrophe has caused meaningful loss for the local insurance industry.

The quake’s epicentre was located about 22.0 km (13.7 miles) south-southeast of the city of Hualien in Hualien County on Taiwan’s east coast, which will likely see the most damage according to experts.

Taiwan’s long history of development, implementation, and enforcement of seismic codes may mitigate some loss, CoreLogic noted. However, there remains a mix of modern, well-designed buildings and older, unreinforced masonry and non-ductile concrete buildings.

The country has faced a number of disastrous earthquakes before. In the past 50 years, there have been six 7.0 or stronger earthquakes that have struck within 250 km of the April 2024 7.4 event.

The most recent catastrophic earthquake was the 7.6 Chi-Chi Earthquake in 1999m which caused approximately 2,400 deaths and 11,000 injuries.

The Chi-Chi earthquake also damaged over 100,000 buildings – destroying approximately 52,000 buildings and severely damaging another 54,000 – at an estimated cost of $14.1 billion, according to the International Disaster Database, EM-DAT as of 2012.

According to CoreLogic, the initial monetary impact estimates from the April 7.4 earthquake and subsequent aftershocks are not expected to be as devastating as the Chi-Chi Earthquake.

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