Seen at Insurance Journal:
In a special report A.M. Best Co. warns that “lurking beneath Central Europe are numerous faults that rarely break the ground surface but that still could lead to large scale catastrophe losses for insurers and reinsurers.”[...]
“A quake in Central Europe would not have to be as powerful as the 1906 San Francisco earthquake or the 6.7 magnitude Northridge, California quake in 1994 to generate at least $10 billion in total losses,” said Best. “This is due primarily to the growing concentration of property values exposed, the quality of existing building stock and the tendency of the soil in some regions to liquefy.”
Despite the growing risks, Best found that “penetration rates for earthquake insurance remain low. In countries such as Italy and Turkey, less than 30 percent of the total expected losses from earthquakes likely to happen once every 200 years would be insured.”
I wonder if saying “at least we don’t have any European quake exposure” would be a useful line to bring up when renegotiating reinsurance contracts. (Probably not…)
