PERILS raises Turkey earthquakes insured loss estimate to $4.9bn
Zurich-based catastrophe insurance data provider PERILS AG has updated its insured property market loss estimate for the Kahramanmaras Earthquake Sequence to TRY 92.8 billion, which is approximately $4.9bn at February 2023 exchange rates and $3.4bn at the current exchange rates.
This new loss figure compares to the previous PERILS estimates of TRY 86.4 billion issued three months after the event, and TRY 65.4 billion issued six weeks after the event.
According to the firm’s coverage definition for Turkey, the numbers include losses from the property line of business. Losses from other lines of business, as well as losses from Syria, are not included.
Luzi Hitz, CEO of PERILS, commented, “At current exchange rates, TRY 92.8bn translates to approximately USD 3.4bn or EUR 3.1bn. However, in February 2023 when the earthquakes struck, TRY 92.8bn equated to approximately USD 4.9bn or EUR 4.6bn.
“Currency fluctuation is one example of the many challenges facing the Turkish insurance market as it continues to successfully process an unprecedented number of insurance claims from this event.
“We are deeply grateful to our insurance partners for providing PERILS with this detailed loss information during such demanding times and trust that our industry data will help to increase the understanding of Turkish earthquake risk.”
PERILS explained that the Kahramanmaras Earthquake Sequence consisted of three major earthquakes measuring Mw 7.8, Mw 6.7, and Mw 7.5 on the moment magnitude scale.
The catastrophe insurance data provider continued, “They occurred along the southwestern end of the East Anatolian fault system and caused extreme ground shaking in south-central Turkey and northwestern Syria.
“The impacted region is highly seismically active, sitting at the triple-junction between the Anatolian, Arabian, and African tectonic plates.
“The East Anatolian Fault is a 700km long, northeast-southwest network of strike-slip faults that separate the Anatolian micro-plate to the north from the Arabian plate to the south, accommodating the westward extrusion of Turkey into the Aegean Sea.”
PERILS also highlighted that the earthquake sequence caused immense loss of life and human suffering. According to the firm, more than 59,000 people lost their lives, and an estimated 3 million people were displaced.
Official government figures put the cost of direct physical damage at TRY 1.6 trillion and indirect economic costs at TRY 350bn.
In terms of insured losses, it is the costliest catastrophe event in Turkey’s history.