The 25th anniversary of India's Bhuj earthquake highlights the seismic risk facing one of the world's fastest-growing economies, according to a report from Guy Carpenter.
The magnitude 7.7 earthquake struck on January 26, 2001, coinciding with India's Republic Day celebrations. The epicenter was located near Chobari village in Gujarat's Kutch district, approximately 70km from Bhuj, with shaking lasting 90 to 110 seconds.
Soft soil conditions in the Rann of Kutch region caused widespread liquefaction, a phenomenon where soil loses strength and behaves like liquid. The effects extended to Ahmedabad, damaging bridges, dams and port buildings, including India's busiest port at Kandla.
The disaster killed more than 13,000 people and injured 167,000 others. Nearly 340,000 buildings were destroyed and over 725,000 were damaged, including cultural sites such as the Swaminarayan temple.
The earthquake exposed gaps in India's seismic building code, which was first published in 1967. A 2002 revision reclassified seismic zones and elevated the Rann of Kutch to zone 5. In November 2025, regulators introduced zone 6 as a new highest-risk classification for the Himalayan arc region.
India has maintained 6% to 7% annual GDP growth over the past decade, with Gujarat and Maharashtra contributing roughly 25% of national output. The insurance market has expanded, with non-life premiums growing 8.3% annually since 2001.
Gross domestic premiums now total US$75 billion, with general insurance comprising 43%. Fire and engineering aggregates have grown 12% annually over five years. Maharashtra, Gujarat, Karnataka and Tamil Nadu account for approximately 50% of insured risks.
Despite market growth, catastrophe insurance penetration remains low. The 2001 earthquake produced insured losses of US$100 million to US$200 million against US$4.5 billion in economic losses. A similar event today could generate economic losses of US$50 billion to US$100 billion, according to the report.
The findings underscore a broader regional challenge. Asia remains the most exposed region globally to uninsured natural disaster losses, with the insurance protection gap reaching 82.8%.
Insured losses cover only 12% of economic losses in Asia, compared to 48% in North America. In 2024, global economic losses from natural catastrophes surpassed US$300 billion for the ninth consecutive year, with nearly US$145 billion of those losses insured.
