PERILS issues final insured loss estimate for Turkey earthquakes of $6.2bn – Reinsurance News

Zurich-based catastrophe insurance data provider, PERILS AG, has released its final insured property market loss estimate for the Kahramanmaras Earthquake Sequence of TRY 116.9 billion, approximately USD 6.2 billion at February 2023 exchange rates.

This new loss figure compares to the previous PERILS estimates of TRY 117.0 billion (USD 6.2bn) issued in February 2024, TRY 92.8 billion (USD 4.9bn) in August 2023, TRY 86.4 (USD 4.4bn) billion in May 2023, and the initial estimate of TRY 65.4 billion (USD 3.5bn) issued six weeks after the event.

In line with the PERILS coverage definition for Turkey, the estimates include losses from the property line of business. Losses from other lines of business and Syria are not included.

To recap, the Kahramanmaras Earthquake Sequence of 6 February 2023, consisted of three major earthquakes measuring Mw 7.8, Mw 6.7, and Mw 7.5 on the moment magnitude scale and affected large parts of south-central Turkey and neighbouring Syria.

PERILS has highlighted that the tragedy caused immense loss of life and human suffering. According to the firm, approximately 62,000 people lost their lives, and an estimated 3 million people were displaced.

Official government figures estimated the economic cost at close to TRY 2 trillion, around USD 105 billion at the exchange rate of February 2023.

In terms of insured losses, it is the costliest catastrophe in Turkey’s history, with residential building losses covered by the government-run Turkish Catastrophe Insurance Pool (TCIP), commercial lines losses and TCIP top-up losses covered by the private insurance industry.

Luzi Hitz, Product Manager at PERILS, commented: “The Kahramanmaras Earthquake Sequence was an immense human tragedy, and it will take many years to address the full impact of this event. Insurance is only one component of the overall response to such a catastrophe. The Turkish insurance industry has been extremely proactive, ensuring efficient claims handling and rapid payment.

He continued: “Post-event reinsurance renewals saw substantial changes but were successfully concluded, while a new mechanism has been implemented to adjust the coverage provided by the Turkish Catastrophe Insurance Pool in line with inflation. This event has clearly been very challenging for the Turkish insurance market but has been met with an incredibly pragmatic, ‘can-do’ response.”

“As the industry loss figure has hardly moved from our fourth loss report and given that affected insurers do not expect further material loss development, this fifth loss report on the Kahramanmaras Earthquake Sequence is our final report,” Hitz concluded.