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Insured losses from Italy quake to hit €200 million

Insured losses from Italy quake to hit €200 million

Insured losses from Italy quake to hit €200 million Echoing initial forecasts of some risk modelling firms, Fitch Ratings said the powerful earthquake that devastated central Italy last week is likely to have a limited impact on local insurance companies.
 
The ratings agency said insured losses from the magnitude 6.2 temblor will be worth at least €100 million (about £85 million) and can go up to €200 million (approximately £170 million), arising mainly from property lines.
 
“Our estimate reflects the low density of population and businesses and limited insurance coverage in the region,” Fitch said.
 
Insured losses for primary insurers will cost €40 million to €80 million, while reinsurers will have to shoulder up to €120 million, according to Fitch.
 
Apart from the low insurance penetration in the quake-hit region, the Italian government’s declaration of a state of emergency has further limited the disaster’s impact on the industry.
 
“The declaration of a state of emergency means that certain losses will be covered by a state fund for emergencies, limiting losses for insurers,” Fitch said.
 
According to the agency, an equally powerful earthquake that struck a nearby area in 2009 – where the insurance exposure was higher – caused insured losses of around €250 million.
 
That earthquake left 308 people dead while last week’s tragedy killed at least 250 people and cost US$1 billion to US$11 billion in economic losses, Bloomberg reported.
 
The report noted that the level of property and casualty cover taken out by Italians is among the lowest of the industrialized countries.
 
Citing data compiled by Swiss Re, Bloomberg reported that insurance as a proportion of gross domestic product in Italy was only 1.9% in 2014.
 
“It’s very tragic that most people are not insured, although it wasn’t a secret that this region could be shaken by a quake,” Stefan Schuermann, an analyst at Vontobel Securities AG, told the news agency.
 
Italy’s largest insurer, Assicurazioni Generali SpA, , and Germany’s Allianz said they expect claims to be limited because most of the homes in the largely residential areas were not covered for earthquakes.
 
 
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