Insured losses from the deadly eastern Turkey earthquake are likely to be in the range of $US55 million to $US200 million ($51 million-$187 million), most of which will be passed on to international reinsurers from the Turkish Catastrophe Insurance Pool (TCIP).

Eqecat has estimated the loss from the 7.2 magnitude earthquake, which occurred on October 23, at between $US100 million ($93 million) to $US200 million based on damage to residential buildings.

AIR Worldwide’s estimate is between $US55 million and $US170 million ($159 million), based on damage to residential and commercial structures.

AIR Worldwide UK MD Milan Simic told AM Best’s BestDay that all the major reinsurance players will be involved via the TCIP and cover to private insurers.

The TCIP was established in 2000 and provides compulsory earthquake insurance for residential buildings, with private companies offering top-up cover. Limits per policy under the cover are around $US30,000 ($28,000) with deductibles typically 2%.

Although insurance is compulsory for buildings within municipal boundaries, Eqecat estimates that only around 20% of buildings are insured, and says take-up rates in the east are less than the national average.

Dr Simic says that about one-third of Turkish insurance industry exposure is in Istanbul and the TCIP holds 3 million policies. 

He says an issue for the insurance industry is the vulnerability of Turkey’s buildings, with a number of concrete buildings collapsing.