Insured losses from Turkey quakes 'could exceed $7 billion'

Insured losses from Turkey quakes ‘could exceed $7 billion’

27 February 2023

Catastrophe modeller Moody’s RMS estimates the insurance industry will cover more than $US5 billion ($7.43 billion) in losses relating to a series of earthquakes that struck Turkey and Northern Syria earlier this month.

Private insurers and the government-run Turkish Catastrophe Insurance Pool (TCIP) will bear the cost, which only includes losses in Turkey.

Cities in Southern Turkey were devastated by a magnitude 7.8 and subsequent 7.5 quakes on February 6, with more than 47,000 deaths reported and about 335,000 buildings damaged.

Overall economic losses are projected to exceed $US25 billion ($37.15 billion), as Moody’s reports damage to mid to high-rise buildings as a notable factor.

The analysis refers to infrastructure failings as a key contributor to the extent of damage, with many buildings found to be vulnerable to the tremors due to a “systemic lack of adherence to seismic provisions”.

“The events highlighted the devastation that can arise when large magnitude events coincide with vulnerable building stock,” Moody’s RMS Product Manager Laura Barksby said.

“We continue to learn from each significant earthquake, and the events in Turkey act as a wake-up call for other earthquake-prone regions, particularly concerning the true quality of the building stock.”

Moody’s RMS says the recovery will take years as the country continues to battle difficult economic conditions, including soaring inflation.