PERILS: initial loss estimate for the Izmir earthquake of 30 October 2020 at EUR 55 million

17 December 2020 — Daniela GHETU
PERILS' initial estimate of the insured property market loss for the Izmir Earthquake, based on claims data collected from Turkish insurers, is TRY 532 million (EUR 55 million at exchange rate of 30 October 2020), the independent Zurich-based organization providing industry-wide catastrophe insurance data announced.

While a total of 14 Turkish provinces were affected, the majority of the insurance losses occurred in the province of Izmir, in particular Izmir City, Turkey's third largest city. Losses also incurred in the Motor and Marine Hull lines of business, the latter driven by a small tsunami triggered by the earthquake. These represent however a minor part of the industry event loss and are not included in the PERILS loss estimate.

While the industry loss resulting from the Mw 6.9 Izmir Earthquake is currently below the PERILS loss-capturing threshold for Turkey (EUR 200m), the prominence of the event in local and international media led PERILS to make an exception to the standard reporting criteria. PERILS will continue to monitor the event for any further significant loss development and will release an updated loss estimate in the event that the loss-capturing threshold is exceeded.

The earthquake occurred on 30 October 2020 at 14:51 Turkish local time with a Moment Magnitude of Mw 6.9, according to the Kandilli Observatory. The epicentre was located in the East Aegean Sea to the west of the Turkish coastline. Ground shaking of MMI VI-VII was widespread in the western province of Izmir and locally reached VIII through shaking amplification effects. Non-structural damage affected a total of 14 Turkish provinces. Severe damage up to the total collapse of buildings occurred in Izmir City and was mainly the consequence of poor building quality and local ground shaking amplification. The vast majority of the total death toll of 114 people occurred in Izmir City, as did the loss incurred by the insurance industry.

Even though the event represents the largest earthquake-related industry loss in the past 20 years, it is being successfully managed by the Turkish insurance industry thanks to its high level of earthquake preparedness. In Turkey, residential building insurance is available from the Turkish Catastrophe Insurance Pool (TCIP), while residential contents, top-up covers to TCIP, and commercial property coverage is available from non-life insurance companies.