Insured losses from a devastating earthquake in Chile could exceed $2 billion, a level that probably won’t have a big impact on reinsurers or the pricing of insurance.
Chile’s well developed economy and reliance on private insurance coverage will aid in its recovery, unlike some other emerging markets that have been through devastating natural disasters.
AIR Worldwide, a catastrophe risk modeling firm, estimates that insured losses from the 8.8 magnitude earthquake that hit Chile Saturday could exceed $2 billion. The total economic losses could be more than $15 billion, the company said Monday. The loss estimate takes into account insured damage to property, business interruption losses and higher prices for cleanup and redevelopment materials, services and labor due to a surge in demand after the catastrophe.