The third loss estimate for the Kahramanmaras Earthquake Sequence, which hit large parts of south-central Turkey and neighboring Syria on Feb. 6, 2023, has risen to $3.4 billion, according to PERILS, the independent Zurich-based organization that provides industry-wide catastrophe insurance data.
Based on claims data collected from affected insurance companies, PERILS’ third estimate of the insured property market loss for the Kahramanmaras Earthquake Sequence is 92.8 billion Turkish lira (approximately US$4.9 billion at February 2023 exchange rates and US$3.4 billion at the current exchange rate).
The figure compares to the previous PERILS estimates of TRY86.4 billion, issued three months after the event, and TRY65.4 billion, issued six weeks after the event. The numbers detail losses from the property line of business.
In terms of insured losses, the earthquake is the costliest catastrophe event in Turkey’s history, PERILS said, noting that losses from other lines of business and losses from Syria are not included in the PERILS’ estimates.
“At current exchange rates, TRY92.8 billion translates to approximately US$3.4 billion or €3.1 billion. However, in February 2023 when the earthquakes struck, TRY92.8 billion equated to approximately US$4.9 billion or €4.6 billion,” commented Luzi Hitz, CEO of PERILS.
“Currency fluctuation is one example of the many challenges facing the Turkish insurance market as it continues to successfully process an unprecedent number of insurance claims from this event,” he added.
The loss information in this third report provides a breakdown of property losses by province (low-resolution CRESTA Zones), with the data further divided by residential and commercial lines, and loss amounts split into buildings, contents and business interruption losses.
PERILS said the dataset serves as a valuable benchmark to compare modeled losses with actual losses and thus facilitates the calibration of catatastrophe models for Turkish earthquake risk.
In line with the PERILS’ reporting schedule, an updated estimate of the market loss from the earthquake will be made available on Feb. 6, 2024, 12 months after the event date.
PERILS described the February earthquake sequence as follows:
“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. They occurred along the south-western end of the East Anatolian fault system and caused extreme ground shaking in south-central Turkey and north-western Syria. The affected region is highly seismically active, sitting at the triple-junction between the Anatolian, Arabian and African tectonic plates. The East Anatolian Fault is a 700 kilometers 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.”
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 TRY1.6 trillion and indirect economic costs at TRY350 billion.
About PERILS
The PERILS Industry Exposure & Loss Database is available to all interested parties via annual subscription. The database contains industry property sums insured and event loss information on a CRESTA zone level and per property line of business. PERILS industry loss estimates can be used as triggers in insurance risk transactions such as industry loss warranty contracts (ILW) or insurance-linked securities (ILS). The service currently covers the following 18 countries: Australia, Austria, Belgium, Canada, Denmark, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Sweden, Switzerland, Turkey, and the United Kingdom. In addition, PERILS industry exposure data are available for Indonesia, the Philippines and Thailand.
Source: PERILS
Photograph: Emergency teams search for people in a destroyed building in Adana, Turkey, Monday, Feb. 6, 2023. (DIA Images via AP)
Topics Catastrophe Trends Natural Disasters USA Profit Loss Earthquake
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