(Bloomberg) -- The earthquake that struck Nepal caused about $2billion in economic losses in the country, and only a fraction ofthe cost will be incurred by insurers, according to KineticAnalysis Corp.

Damage in India could cost an additional $800 million, accordingto figures from the disaster-modeling firm that include propertydamage and long-term business-interruption costs. Less than 1% ofthe losses are covered by insurance, according to Kinetic’s initialdata from the main quake. The estimates exclude costs for immediateneeds such as food.

“Most developing countries just don’t really have matureinsurance industries,” Chuck Watson, Kinetic Analysis’s director ofresearch and development, said in a telephone interview Monday.“It’s getting by day-to-day. They’re not really concerned withthings like insurance.”

The magnitude 7.8 earthquake Saturday and aftershocks killedmore than 3,700 people and displaced millions from their homes.Nepal has a gross domestic product that is smaller than any of the50 U.S. states. Its 28 million people have the lowest spendingpower of any Asian country apart from Afghanistan, InternationalMonetary Fund statistics show.

“I suspect this tragic event will perpetuate the fact thatpreparedness, let alone insurance penetration, was woefully low,”Julian Roberts, lead partner at the strategic risk consultingpractice at insurance broker Willis Group Holdings Plc, said in ane-mailed statement. “We’ll probably find that there was moreinsurance carried by the tourists and expat community out therethan all the Nepalese combined.”

--With assistance from Unni Krishnan in New Delhi and AntoAntony in Mumbai.

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