Earthquake insured losses at USD600-900 mn

Risk modelling firm AIR Worldwide estimates that the insurance and reinsurance industry will deal with an industry loss in the range of USD600 million to USD900 million after the recent magnitude 8.3 earthquake in Chile. “The September 16 earthquake was the result of convergence between the Nazca and South American tectonic plates,” commented Dr. Mehrdad Mahdyiar, vice president and senior director of earthquake hazard research at AIR Worldwide.

The earthquake struck Chile’s central coast near Illapel, creating damage along the coast from both shaking and a tidal wave that resulted from the undersea quake. Chilean authorities said that at least 12 people died as a result of the quake.

Shaking was felt as far away as São Paulo, Brazil, over 3,000 km away. Strong shaking was felt in Chile’s capital city of Santiago, the most populous city in the country, where tall buildings swayed for as much as three minutes.

At under USD1 billion the insurance impact of this event will be easily absorbed and while it could result in some insurers to call on reinsurance support, it is likely to be minimal.