Total property insurance and reinsurance industry losses from the dual Kahramanmaras, Turkey earthquakes are estimated at $2.4 billion, with economic losses pegged at close to $20 billion, according to Karen Clark & Company (KCC).
These estimates do not include losses within Syria, and are based on the KCC Turkey Earthquake Reference Model.
According to KCC, across 10 of Turkey’s 81 provinces, the M7.8 earthquake, which occurred near a triple junction of three tectonic plates close to the Turkey-Syria border, destroyed or heavily damaged more than 41,000 buildings, the majority of which were poorly designed or constructed.
Numerous aftershocks followed the main earthquake, the largest of which was a M7.5 event.
“The widespread damage to buildings, especially near the epicenter, can be attributed in part to ground motion acceleration that was much more intense than the buildings were designed to withstand. That said, much of the damage stems from poor construction practices and lax enforcement of building codes,” says KCC.
The most affected regions in Turkey are Gaziantep, Kahramanmaras, Malatya, Osmaniye, Iskenderun, Antakya, and Adana, with significant damage in Sanliurfa and Diyarbakir as well, notes KCC.
Currently, the death toll is nearing 42,000, and is expected to rise further as search and rescue efforts continue. The number of lives lost is now far higher than the 2011 Tohoku quake, and also the 1999 Ismit quake.
This loss estimate from KCC again highlights the vast protection gap (disparity between economic and insured losses post-event) that exists in the country. An economic cost of close to $20 billion for property losses, of which $2.4 billion is expected to be covered by insurance, points to a protection gap of around $17.6 billion, or 88%.
KCC’s estimate follows that of Verisk’s extreme event solutions, which recently pegged economic losses at more than $20 billion, of which re/insurers would cover just 5%, or more than $1 billion of this total.
Analysts expect insured losses to be limited in light of low insurance penetration levels in the region but do expect reinsurers to absorb the bulk of any industry loss.