An 8.8-magnitude earthquake struck central Chile on Feb. 27, leaving behind more than $2 billion in insured losses, according to AIR Worldwide.
Total economic damages are anticipated to be between $15 and $20 billion — roughly 10% to 15% of Chile’s read GDP, AIR Worldwide and EQECAT estimate.
The area affected by the quake, from Concepción to Santiago, contains residential and commercial properties with an insurable value of about $275 billion, according to AIR. Of the damage incurred to these two locations, only a portion is expected to be insured, according to AIR.
Residential insurance penetration is believed to be as low as 10%, while commercial insurance penetration rates are likely significantly higher, at about 60%, AIR notes.
“The total economic loss will likely be severe from damage not only to buildings, but from the widespread impact on infrastructure, including roads, bridges, airports and utilities and telecommunications networks,” Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide, said in a release.
Chile's widespread adoption and enforcement of modern, seismic-resistant building practices has mitigated the potential for devastation, despite the major disaster, EQECAT says.
While some buildings will have collapsed or suffered irreparable damage, these represent a minority of the overall building stock, EQECAT says.
“While the event has some characteristics of a super cat and is close to the threshold, it does not quite trigger 'super-cat' status, because the city of Santiago is still operating and has not completely collapsed.”