PERILS AG has raised its property insurance and reinsurance industry loss estimate for the series of earthquakes which hit Central Italy between the 26th and 30th October 2016 by over 300%, from the initial estimate of EUR 31 million to a figure of EUR 125 million.
It’s a big increase, but the job of estimate insurance losses from the event cannot have been easy for exposed insurers, as the region of Italy has been so beset by earthquakes in recent months.
The initial estimate of EUR 31 million was released on the 7th December 2016, after the Magnitude 5.4, 5.9, and 6.5 all struck the Central Italy, Lazio, Marche and Umbria regions between the 26th and 30th October 2016.
The revised estimate from PERILS AG, the provider of insurance and reinsurance industry loss estimates and data, is EUR 125 million.
As the loss remains below EUR 200 million, PERILS said it will not update again six months after the event, instead the next update for this Italian earthquake loss event will be on 26th October 2017, when the data will be available by CRESTA zone and by the property sub-lines Residential and Commercial.
The region has been particularly beset by quakes, with the M6.2 earthquake which struck in August near the Umbrian town of Norcia starting the active phase of tectonic activity in the region. That quake was initially estimated to have caused a property insurance and reinsurance market loss of EUR34m, an estimate that subsequently rose to EUR66m at the second update.
More recently, further major quakes have hit the region with a recent event causing an avalanche which resulted in some loss of life. However property damage now is hard to discern from these events, as so many structures in the region have already been damaged.
The Italian quakes in 2016 have negatively affected a number of ILS funds and sidecars, although loss estimates for these are said to be extremely minimal, as you’d imagine for events that resulted in such low industry wide totals.
These quakes are a strong reminder about the lack of earthquake insurance penetration in Italy and the need to increase that figure.