The magnitude 6.0 earthquake which struck northern Italy in the early hours of Sunday morning is not expected to produce major insurance losses as it occurred in an area where personal property insurance uptake rates are very low. The quake is the largest to have struck Italy since the 6.3 quake in 2009 which caused extensive damage and loss of life. Sundays quake has damaged many older buildings and is responsible for a number of deaths.
Italy, and other areas of southern Europe, are exposed to earthquakes but due to their infrequent nature building standards are not sufficient to protect properties. A major quake in a region such as this would likely cause significant loss of life and damage but the insurance impact would often be lower due to the lack of insurance uptake.
Swiss insurance-linked securities investment manager Plenum Investments said that the quake would not cause any impact to their portfolio of catastrophe risks as they do not hold any earthquake exposure in Italy. Catastrophe bonds exposure to European earthquake risk is confined to Turkey. It is possible that some collateralized reinsurance underwriters could see very minor losses due to this quake if they are exposed in the region.
You can see the location of this earthquake and the intensity of ground movements in the map below:
Update: Risk modeller EQECAT have published a CatWatch report discussing this event and say that the expected total of insured losses will likely be around €100m ($127m) and even with significant loss creep is unlikely to pass €200m. Read the full CatWatch report from EQECAT on our dedicated page here.
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