earthquake

The longer-tail nature of some earthquake loss events continues to be demonstrated by the Canterbury, New Zealand disasters, with the Insurance Council reporting that paid insurance losses have now hit $19 billion, up $1 billion since the end of June.

Demonstrating the significant lack of earthquake insurance in Italy the first insurance industry loss estimate from PERILS AG for the event suggests an insured loss of just EUR34m, which is a paltry amount of property insurance loss for such a damaging event.

Gross insurance industry losses from the recent M6.2 earthquake in Umbria, Italy are not expected to exceed EUR200 million, according to rating agency Standard & Poor’s, which believes that the low levels of insurance penetration in the region will keep losses down.

Rating agency A.M. Best estimates that around 10% of the total economic losses from last week’s devastating M6.2 earthquake in Umbria, Italy will be paid for by insurance and reinsurance markets, as low levels of insurance penetration limit the industries exposure.

Fitch Ratings has estimated that Italian insurers will only face a loss of between EUR100m and EUR200m, with reinsurance capital paying for the majority of claims, from this weeks magnitude 6.2 earthquake, far below the estimated figure of an $11 billion economic loss.

An early estimate from the Italian Civil Protection Department suggests that this weeks devastating earthquake in Italy, near the Umbrian town of Norcia, could result in economic losses of around $11 billion, but the insurance and reinsurance market loss will be significantly lower.

The magnitude 6.2 earthquake which struck the Umbria region of Italy overnight is not expected to be strong enough to trigger the Azzurro Re I Limited catastrophe bond, according to Zurich, Switzerland based ILS fund manager Plenum Investments.

A magnitude 6.2 earthquake has struck overnight in the Umbria area of Italy, with early reports of 10 deaths, people still trapped and widespread damage to buildings and structures in the affected region.

The Insurance Council of New Zealand said that private insurance and reinsurance firms have now paid out more than $18 billion to settle commercial and residential claims from the Canterbury earthquakes, but ever since the quakes the magnitude of the loss has been filled with uncertainty.

British Columbia (BC), the westernmost province in Canada, has identified a need to develop a fast-response insurance solution to protect vital infrastructure in the event of an earthquake, and has already started working with reinsurers.