Mexico’s Evaluacion de Riesgos Naturales (ERN International) has provided an insured loss estimate of up to $4.8bn for the Magnitude 7.1 earthquake that struck around 120km southeast of Mexico City earlier this month, resulting in widespread damage to buildings and hundreds of fatalities.
ERN International is a seismic engineering entity headquartered and founded in Mexico City. The firm has announced an insurance industry loss estimate of up to $4.8bn for the event, which is based on a portfolio of buildings that is representative of both the size and distribution of insured buildings.
Furthermore, catastrophe risk modellers AIR Worldwide and RMS have both produced a lower insurance industry loss estimate for the event.
AIR Worldwide, has provided an insurance industry loss for the event of between $730mn and $2.06bn.
RMS has provided an insured loss estimate for the event of up to $1.2bn.
In Mexico City, 52 buildings collapsed and roughly 500 more were damaged including schools, hospitals and churches.
AIR reports that most residential buildings in Mexico are vulnerable to shake damage whilst commercial buildings are generally better able to withstand shaking from an earthquake.
The firm expects total economic losses from the event to be far higher than the insured loss, something also noted by RMS, which also underlined the low level of insurance penetration in the region.
Based on current building information from the Mexican authorities, RMS estimates that economic shake losses will be between $4bn and $8bn, while no more than $1.2bn will be covered by insurance protection.