Turkey earthquake insured losses up to $200M: EQECAT

VAN, Turkey—The earthquake that hit eastern Turkey on Sunday likely will cause insured losses of $100 million to $200 million, according to modeling firm EQECAT Inc.

Total economic damage caused by the quake, which has been followed by a series of aftershocks, is likely to be in the “low single-digit billions” of dollars, EQECAT said, or about one-tenth of the economic damage that was caused by the devastating 1999 Izmit earthquake in western Turkey in which nearly 20,000 people were killed.

This week's 7.2 magnitude quake, which had its epicenter in the city of Van, is known to have killed 272 people and injured more than 1,300, though up to as many as 1,000 people may have died, according to reports.

After the 1999 Izmit earthquake, the Turkish government introduced new construction codes that were updated in 2006, according to modeler AIR Worldwide Corp. But many buildings in Van likely were built before the introduction of the code, AIR noted.

According to Risk Management Solutions Inc., while the Turkish Catastrophe Insurance Pool set up in 2000 covers residential properties for earthquake damage, only about 7% of dwellings in the Van region have coverage.

The pool, which is funded by insurers and backed by the World Bank and the Turkish government, retains the first $80 million of losses from an earthquake and transfers excess losses to the international reinsurance markets.

Neither AIR nor RMS had estimated losses as a result of the quake.