Catastrophe risk modeller Moody’s RMS anticipates economic losses from the two February 6th earthquakes in southern Turkey to surpass $25 billion, with insurance and reinsurance industry losses likely to exceed $5 billion.
These estimates from Moody’s RMS exclude any losses in Syria, so are based only on the impacts of the earthquakes in Turkey and include losses to private insurers as well as to the Turkish Catastrophe Insurance Pool (TCIP).
Both estimates are based on an analysis of the quakes leveraging Moody’s RMS Europe Earthquake Models and reflect damage to property and contents, and business interruption across residential, commercial, and industrial lines in Turkey.
However, the estimates exclude post-event loss amplification or losses to non-modelled exposures, such as transport and utility infrastructure.
“The earthquakes ruptured geometrically complex faults with multiple branches and were part of an active sequence that included over 400 events of Mw4 or greater,” said Nilesh Shome, Vice President of Earthquake Model Development at Moody’s RMS.
“It is very unusual for an earthquake to trigger another event of such a magnitude as the Mw7.5 earthquake. The two largest earthquakes generated significant ground motions, and many areas were impacted by both events.”
Data from the Turkish Ministry of Environment, Urbanization, and Climate Change, shows that 11 provinces were severely impacted by the quakes, with the worst of the damage seen in Gaziantep, Hatay, and Kahramanmaraş.
As of yesterday, a reported more than 335,000 buildings have been damaged. Mainstream media reports suggest that more than 47,000 people have lost their lives as a result of the M7.8 and M7.5 earthquakes that struck on February 6th.
“The events highlighted the devastation that can arise when large magnitude events coincide with vulnerable building stock. We continue to learn from each significant earthquake, and the events in Turkey act as a wake-up call for other earthquake-prone regions, particularly concerning the true quality of the building stock,” said Laura Barksby, Product Manager, Moody’s RMS.
These estimates from Moody’s RMS come after risk modeller KCC warned of economic losses of close to $20 billion from the earthquakes, with insured losses pegged at $2.4 billion.
Verisk’s Extreme Event Solutions has also commented on the quakes, providing an economic loss estimate of more than $20 billion, of which more than $1 billion will be covered by insurance.
While these estimates do differ slightly, one thing that’s clear is the vast protection gap (disparity between economic and insured losses post-event) that exists in the region. The large majority of the costs will not be covered by insurance protection amid low levels of insurance penetration, meaning that the government will have to foot the bill as the region looks to rebuild.
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