The recent earthquake affecting the Izmir region of Turkey has been designated as a catastrophe event by Property Claim Services (PCS), a division of Verisk Analytics.
As a result of the designation, PCS will now analyse and track data collected from the insurance industry in the region, to derive an industry loss figure that will be reported back to users of its PCS Turkey service.
The magnitude 7.0 earthquake struck off the coast of Turkey on October 30th and devastated some areas, with significant property damage caused.
The earthquake also impacted some of the Greek islands, although damage here won’t be included in PCS’ industry loss assessment, as the quake falls under its PCS Turkey service.
It’s the first PCS Turkey designation of a catastrophe industry loss event since 2017, we understand.
The city of Izmir, Turkey was the region most affected by last week’s earthquake, with the nearly 3 million residents rocked by the quake and a significant amount of damage to property seen, with some buildings completely flattened.
Around 300 buildings experienced at least some structural damage it has been reported and the death toll stands above 110, with over 1,000 more injured by the earthquake.
While the overall loss to the global insurance and reinsurance industry is not expected to be significant, the impact to the local insurance market may be more acute.
Turkey’s insurance industry is expanding and for the sector this quake is expected to present a reasonable sized catastrophe loss.
PCS Turkey tracks catastrophe losses that threaten more than 30 million lira (US $3mn) of insurance market losses, providing a valuable service to the country as its insurance market grows, as well as a useful data source for the global reinsurance market and any firms looking to enter into industry loss risk transfer, reinsurance or retrocession arrangements focused on Turkish perils.
Ted Gregory, director of operations, PCS, told us, “This is the fourth PCS Turkey catastrophe designation since we went live with the service in 2016, and it’s the first earthquake since then. We’re already in the process of working our methodology in collaboration with the Istanbul Underwriting Center and the Turkish insurance industry. Izmir is the third largest city in Turkey, and the recent catastrophe event is its first since a 2012 flood event reported under PCS Turkey. Our goal is to help the local insurance industry during this tragedy, and those affected remain in the PCS team’s thoughts.”
Tom Johansmeyer, Head of PCS added, “The fact that we’ve averaged approximately a catastrophe every year since launching PCS Turkey shows how important it is for a loss reporting platform to be active in the country – and to have the right reporting criteria. A lower reporting threshold, coverage for motor physical damage, and inclusion of all natural and manmade perils is crucial for effective loss reporting in Turkey. It’s worth remembering that, before the recent tragedy in Izmir, PCS Turkey reported on terror and hail events, neither of which featured in our historical database.”