Economic losses from Venezuela quakes to exceed $10bn, insured impact still unknown: Verisk

The Catastrophe and Risk Solutions group at Verisk has estimated that economic losses from the June 24, 2026 earthquakes in Venezuela will likely exceed USD 10 billion, with a higher degree of uncertainty than usual in estimating the insured share of industry losses due to Venezuela’s macroeconomic conditions, elevated inflation, low insurance penetration, and sanctions-related market complexities.

The data analytics and technology provider explained that factors contributing to this uncertainty include assumptions regarding earthquake insurance take-up rates, ongoing inflationary pressures, and the challenges associated with accurately valuing insured assets within a rapidly changing economic environment.

“The modeled insured loss estimates do not include losses resulting from fire-following, landslides, sprinkler leakage, loss adjustment expenses, damage to uninsured properties or infrastructure, extra-contractual obligations, hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event,” Verisk commented.

Verisk also noted that the estimates exclude any losses that are associated with civil engineering (railway) risks, marine cargo and marine hull risks, aviation risks, transit warehouse risks, personal accident risks, as well as any other non-modeled sources of loss.

Verisk’s estimate sits in line with the US Geological Survey’s (USGS), who previously said that there was a 45% chance the economic costs from the event could exceed USD 10 billion.

For background, on June 24th, Venezuela was struck by a rare earthquake doublet near Yumare-Morón in Yaracuy state, approximately 100 miles west of Caracas, the capital of Venezuela.

A magnitude 7.2 foreshock quake was followed just 39 seconds later by a magnitude 7.5 mainshock, making it the strongest earthquake to impact Venezuela since 1900.

“The shallow strike-slip rupture occurred along the San Sebastián fault system within the tectonically active boundary zone between the Caribbean and South American plates and was subsequently followed by more than 430 recorded aftershocks,” Verisk explained.

Damage was reportedly most severe across the Caracas metropolitan region and along the coastal state of La Guaira, where an estimated 1,400 buildings were said to have been destroyed.

The earthquakes also caused significant destruction across the states of Aragua, Carabobo, and Yaracuy.

In addition, a number of communities, including Puerto Cabello, Catia La Mar, Maiquetía, San Felipe, Los Teques, Petare, Valencia, and Baruta experienced severe shaking, according to U.S. Geological Survey intensity estimates.

Verisk explained that the majority of residential buildings located in Venezuela’s urban areas are constructed of masonry, including reinforced masonry, confined masonry, and unreinforced masonry structures.

“Reinforced concrete is the predominant construction type in mid- and high-rise residential buildings, particularly in major urban centers such as Caracas. Although modern engineering standards exist, seismic performance varies significantly due to local construction practices, material quality, and enforcement of building codes,” Verisk noted.

The firm also emphasised how Venezuela’s insurance and reinsurance sector remains relatively small and highly concentrated compared to many other markets across the globe.

Venezuela’s re/insurance market continues to operate under challenging macroeconomic conditions characterized by elevated inflation, currency depreciation, regulatory complexity, and limited market capacity.

“These conditions create additional uncertainty when estimating insured losses following a catastrophe. Variations in earthquake insurance penetration, coverage levels, and insured property values can materially influence the ultimate insured share of economic losses resulting from the earthquake sequence,” Verisk added.