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Colombia earthquake expected to drive insured losses across LatAm
Guy Carpenter links the quake’s insured impact to Colombia’s higher earthquake coverage, with earthquake deductibles typically ranging from 5% to 20%.
A magnitude 7.4 earthquake that struck western Colombia on 10 August is expected to generate insured losses that extend beyond the country into the wider Latin American insurance market, according to reinsurance broker Guy Carpenter, a Marsh business.
Carpenter said the quake’s epicentre was near San José del Palmar in the Chocó Department, about 250 miles west of Bogotá, at a depth of 107 kilometres. The broker cited at least 181 deaths and widespread infrastructure damage, including six airport suspensions and early reports of more than 150 buildings toppled.
Guy Carpenter attributed part of the potential market impact to Colombia’s relatively higher earthquake insurance penetration. It noted that earthquake cover can be included in policies, often for an additional premium, and that earthquake deductibles commonly range from 5% to 20%, meaning more exposed property may translate a larger share of damage into insured losses.
AM Best also commented that the earthquake is expected to drive claims across multiple insurance lines, notably commercial and residential property, while it expects lower insurance penetration near the quake’s epicentre. The ultimate insured loss scale remains uncertain as damage assessments continue.