PERILS pegs insurance losses from Turkey quake at $3.5 billion

PERILS has disclosed its initial industry loss estimate for the Kahramanmaras Earthquake Sequence which caused widespread devastation across several regions of the Republic of Türkiye and the Syrian Arab Republic on 6 February 2023.

The estimate of the insured market loss, based on loss data collected from the Turkish insurance market, is TRY 65.4 billion / $3.5 billion.

It does not include losses which occurred in Syria as this region is not covered by PERILS. 

Largest insurance loss in Turkey’s history

In terms of insured losses, the loss represents the costliest catastrophe event in Turkey’s recorded history.

In Turkey, according to official figures, more than 160,000 buildings containing 520,000 apartments were destroyed, damaged or will need to be demolished. Many more are partially damaged and will need to be repaired.

A recent study by the Department of Economics of the Koç University put the economic losses in Turkey in the range of $70 billion to $87 billion.

Luzi Hitz, CEO of PERILS, commented: “Shallow earthquakes of magnitudes Mw 7.8 and Mw 7.5 cause severe devastation in any built environment. Although the insurance industry in Turkey offers protection for the financial consequences of such events, the take-up rate remains low, or the coverage limits purchased are far below reconstruction costs.

”Earthquake insurance is not only a challenge in Turkey, but also in other regions exposed to high seismic activity such as Japan or California, where insurance penetration for the peril remains low.

”Through providing our industry loss data our aim at PERILS is to help improve understanding of such highly destructive perils and by so doing facilitate the increased penetration of insurance solutions into these earthquake-exposed territories.”

Humanitarian catastrophe

On 6 February 2023, a Mw 7.8 magnitude earthquake struck south central Turkey near the Turkey/Syria border. The earthquake initiated at a shallow depth of 10km, at the south-western end of the East Anatolian fault system. It produced a surface rupture length of approximately 250km.

Just 11 minutes after the first shock, a Mw 6.7 aftershock occurred. Nine hours later, another powerful Mw 7.5 earthquake struck 95km to the north, on an adjacent but separate fault also within the East Anatolian fault system.

This second massive earthquake initiated at a depth of 15km and produced a surface rupture length of approximately 90km.

Eleven provinces in south-eastern Turkey were impacted by the earthquake sequence (with a combined population of approximately 14 million), with the provinces of Hatay, Kahramanmaras, Gaziantep, Malatya and Adiyaman worst affected.

The level of human suffering and loss of life was immense – according to the latest official figures over 56,900 deaths were reported, 48,448 in Turkey and 8,476 in Syria, as buildings collapsed at a time when most were at home sleeping. Close to 130,000 people were severely injured.

An estimated 2.4 million people were displaced from their homes and are currently living in tents and temporary shelters due to the event.