Insured losses caused by an earthquake in Italy last month will be low, owing to very limited insurance penetration, according to Impact Forecasting, Aon Benfields catastrophe model development team.
Insured losses caused by an earthquake in Italy last month will be low, owing to very limited insurance penetration, according to Impact Forecasting, Aon Benfield's catastrophe model development team.
In its latest catastrophe report, published today, the 6.2 magnitude earthquake that struck central Italy on 24 August affected parts of Umbria, Abruzzo, Lazio, and Marche regions, killing 296 people.
The hardest-hit towns included Amatrice, Accumoli, Pescara del Tronto, Arquata del Tronto, and Posta, the report confirmed.
Total economic damage is estimated to reach "billions of dollars" but low coverage in the region means the insured loss portion is expected to be "a fraction of the overall cost".
Steve Bowen, Impact Forecasting director and meteorologist, said: "As we enter the final third of 2016, roughly 75% of the year's disaster losses have been uninsured."
Ratings agency S&P also agreed payout for the disaster would be low.
S&P's analyst Tao Fudji said: "We expect the domestic insurance sector to face low final costs from the earthquake. Because property insurance in Italy is not particularly well developed, the cost of rebuilding will fall mainly on the government."
Fudji added earthquake insurance policies remained "unattractive" to consumers due to their high cost and Italians' expectations of government intervention.
"We consider that some form of government funding or tax credit, as exists in other countries, could incentivise private sector subscription to cover these risks."