Aegean Sea earthquake caused up to $1B in losses in Turkey, Greece

Last modified November 6, 2020. Published November 6, 2020.
A bulldozer demolishes a building that was damaged in the Oct. 30 earthquake in Izmir, Turkey, Nov. 4, 2020. (AP Photo/Emrah Gurel)

A bulldozer demolishes a building that was damaged in the Oct. 30 earthquake in Izmir, Turkey, Nov. 4, 2020. (AP Photo/Emrah Gurel)

said Friday that large insured losses are expected from an Oct. 30 earthquake that damaged thousands of buildings in Turkey and Greece, with the United States Geological Survey estimating losses up to $1 billion.

The 7.0 earthquake, which struck the eastern Aegean Sea and caused massive damage in Turkey’s Izmir Province and Greece’s Samos Island, was the deadliest earthquake of 2020, killing at least 116 people, injuring more than 1,000 and damaging thousands of buildings, according to the London-based insurance broker’s weekly global catastrophe report

A complete assessment of property damage in Izmir is not yet available, but Aon said in its report that at least 12 structures, mostly residential apartment buildings, were destroyed in Izmir, and that 4,500 damaged buildings had been assessed as of Nov. 2 during a process that was expected to take 10 days. Further damage was caused by a tsunami triggered by the quake, mostly in the Seferihisar district on Izmir Province’s southern coast. According to the report, 22 boats sank and 43 ran aground.

“It is worth noting that initial reports from the area suggested that [the] majority of buildings that collapsed during the event were built prior to 1999, when a destructive earthquake in Izmit [in northwestern Turkey] prompted authorities to pass stricter building regulations with an emphasis on earthquake-resistant construction,” Aon said. 

According to the Turkish Natural Catastrophe Insurance Pool, about 57% percent of residential property stock in Izmir Province is insured, slightly above the national average of 55.5%. More than 10,000 claims have been filed, Aon said, with “further dozens to hundreds damage cases” expected from Samos in Greece.

The earthquake was one of three events for the week ending Friday that Aon estimated caused hundreds of millions in preliminary economic losses. Hurricane Eta, which struck Central America, and Typhoon Goni, which walloped the Philippines, also caused large losses.

Eta made landfall Wednesday along the Caribbean coast of Nicaragua as a Category 4 storm, with maximum sustained winds of 140 mph. It produced high storm surges along the coast and spread “incessant rainfall” inland across Central America, according to Aon, with regions of Nicaragua and Honduras most affected. At least 13 people were killed, and extensive damage to infrastructure, agriculture, and physical property will “quickly aggregate” in the hardest-hit parts of Nicaragua, Honduras, and Guatemala, Aon said. But the firm added that very low insurance take-up in Central America will result in most damage being uninsured. 

Goni, a “super typhoon” that made the strongest landfall in recorded history, had one minute average sustained winds of 195 mph shortly before it struck Nov.1 near Bato, a town in the island province of Catanduanes in the Philippines, before moving on to other regions of the country. The storm killed at least 20 people and injured 165, according to Aon. As of Thursday, about 45,000 houses and tens of thousands of other structures were either damaged or destroyed, and a large swatch of agricultural land was affected. 

Aon also reported that an Oct. 31 hailstorm that hammered Queensland, Australia, with hailstones as big as 5 1/2 inches in diameter in addition to hurricane-force winds, led to approximately 22,500 claims being filed, with total payouts approaching AUD 260 million ($190 million) as of Thursday. The firm said that those numbers will increase. Brisbane, Queensland’s capital, was severely affected by the storm; in 2014, the city was hit by a hailstorm that caused $1.2 billion in insured losses.

The broker also noted a windstorm dubbed Aiden that struck parts of Ireland and the United Kingdom on Oct. 31 and Nov. 1 with strong gusts and heavy rains, but said that material damage was generally minor, with the effect on the insurance sector in those regions expected to be ‘relatively insignificant” and reach into the millions of euros.