According to Aon, the deadly magnitude-7.4 earthquake that struck eastern Taiwan on April 3 is likely to result in a notable event for the local insurance industry due to relatively high take-up rates.
The quake is reportedly the island’s largest in 25 years, with officials having reported at least 10 fatalities and more than a thousand injuries, along with significant material damage to residential and commercial property.
Taiwan’s Central Emergency Operation Center has revealed 2,500 cases of damage nationwide, including 780 buildings and notable damages to local infrastructure.
Meanwhile, the country’s Ministry of Education said that about 430 schools have reported sustaining damage, resulting in an estimated loss of NT$470 million ($15 million) alone.
As per Aon, the quake also caused secondary impacts, including multiple landslides and tsunamis near the epicentre.
Even though damage assessments are still ongoing across the affected area, Aon has noted that total economic losses are highly likely to reach hundreds of millions USD.
Most of the losses were incurred in Taipei, New Taipei, and Hualien counties, though many structures were saved from severe structural damages as more stringent building codes were introduced after a disastrous earthquake in 1999.
“The event is likely to result in a notable event for the local insurance industry due to relatively high take-up rates,” Aon explained.
The firm continued, “Residential earthquake insurance is facilitated by the Taiwan Residential Earthquake Insurance Fund (TREIF) organization through an insurance pool system and since its inception in 2002 (after the devastating 1999 Jiji Earthquake, the take-up rate has increased to nearly 40%.”
However, it is worth observing that Hualien, the region most affected by the quake, has one of the highest protection gaps in the country.
