The recent powerful 6.8-magnitude earthquake that struck Morocco on September 8, is “unlikely to be a major event for the insurance and reinsurance industry”, says Fitch Ratings.
Speaking at a briefing during the 2023 RVS event in Monte Carlo, Robert Mazzuoli, Director in Fitch Ratings’ EMEA insurance group answered a question regarding how the recent earthquake may impact the industry.
“It is very early days, so it is rather difficult to give precise numbers. The event is a major disaster for humanity, but it is unlikely to become a major event for the re/insurance industry,” he stated.
The quake struck in the High Atlas Mountains, roughly 7okm south-west of the World Heritage city of Marrakesh.
The sad result is at least 2,012 people are thought to have died from the earthquake, with just over the same number also being left injured.
Moreover, Mazzuoli compared the likely losses that will stem from the event to the devastating quakes that struck Turkey last year.
“When you think back to what happened in Turkey, we had economic losses in the high, double digits billion US dollar range.
“There was also that second insured loss which was a mid-single digit billion dollar number, so it was already a very low insurance coverage there, and comparison to that I expect that Morocco is even lower.”
It is important to note that Morocco has a social safety net catastrophe insurance system in place, which provides households and organizations with a low-level of guaranteed coverage, through a World Bank supported scheme.
However, this is just basic insurance compensation, despite it covering just under 9 million people against bodily injury in catastrophic events.
In the past its maximum capital available for payouts was just US $100 million per-year.
In addition, the Moroccan government had also, again with World Bank support, established a social protection system to compensate uninsured people through a national solidarity fund. The fund was estimated to expect to make payouts of approximately US $600 million in the event of a 1-in-100 year quake event.
