Further earthquake aftershocks in Italy increase insured losses

A number of damaging earthquake aftershocks struck northern Italy yesterday in the same area which was hit by a magnitude 6.0 quake just over a week ago on the 20th May. Yesterday saw an M5.8 earthquake occur followed by two M4.7 aftershocks, then an M5.4 and an M5.1 according to the USGS information. After the earthquake on the 20th, risk modeller EQECAT said that insured losses were expected to be around €100m, now after a number of damaging aftershocks that number has risen.

EQECAT have revised their insured loss estimate from the 20th May event taking into account further damage caused by these aftershocks on the 29th May to between €300m and €700m, a significant jump. They say that the loss estimate is particularly sensitive to uncertainty in estimates of exposed values and the rate of insurance penetration.

The aftershocks occurred within 15km of the 20th May quake and were at similarly shallow depths of 10km. They subjected tens of thousands of homes and commercial buildings to severe shaking and with the damage caused by the initial quake the aftershocks are expected to inflict further damage to buildings in the region.

These earthquakes are not going to have any impact on catastrophe bonds as no transactions exist with exposure to Italian earthquakes. However it could have some small impact on any ILS funds with collateralized reinsurance exposures in Italy. It will also certainly cause losses to some reinsurers who provide cover in the area.

The full EQECAT CatWatch report can be found here.

A map showing the locations of the Italian earthquakes which have struck in this northern region can be found below.

Location of the earthquakes in northern Italy - From the European-Mediterranean Seismological Centre