Filed Under:Risk Management, Captives

Philippines Quake Insured Losses Not Significant, Says AIR

NU Online News Service, Feb. 7, 12:20 p.m. EST

A magnitude 6.7 earthquake that struck the Negros-Cebu region of the Philippines yesterday is not expected to be a major insurance loss says catastrophe modeler AIR Worldwide.

The quake struck between the islands of Negros and Cebu about 353 miles south- southeast of Manila, Philippines on Feb. 6 at 11:49 a.m. local time (Feb. 5 at 10:49 p.m. EST), says the U.S. Geological Survey.

The USGS says 43 people were killed, 100 are injured and another 40 are missing. Many buildings were damaged or destroyed and at least nine bridges were damaged. There were also reports of landslides, USGS says.

AIR says a “Level 2” tsunami warning was issued for the region, but lifted two hours later. There was also a 6.2 magnitude aftershock about four hours after the initial quake.

“Seismicity in this region is relatively subdued compared to the subduction zones in the northeast and south,” says Bingming Shen-Tu, senior principal scientist at AIR. “However, the earthquakes in the region are relatively shallow crustal events, and therefore are more damaging, as observed with today’s quake.”

AIR says the majority of the damage was concentrated around Guihulngan City, Tayasan and Limalalud. Strong shaking was also observed in the city of Cebu, with a population of 2.5 million.

In the cities, construction is generally reinforced concrete with hollow brick infill, says AIR. In the main city of Cebu, buildings are constructed “relatively well,” the modeler says. However, the coastal area buildings are not as well constructed.

AIR says the Philippines is the 64th largest non-life insurance market in the world and 87 percent of the market is dominated by domestic carriers.

Due to aftershocks, a detailed assessment is delayed, but based on initial reports, “AIR estimates that insured losses from this event will not be significant.”

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