NU Online News Service, Oct. 1, 3:17 p.m. EDT
Catastrophic property damage has occurred in Indonesia due to a killer earthquake off the coast of Southern Sumatra, Indonesia, but one catastrophe modeling firm said insured losses are expected to be light.
Analyzing the quake, which killed hundreds of persons, AIR Worldwide said it used the latest available information about the event in addition to its earthquake model for Indonesia, and is estimating that insured losses will not be significant.
AIR said although Indonesia established a national earthquake insurance pool in 2003 and participation is mandatory for all general insurance and reinsurance companies, earthquake insurance penetration is still very low and the pool, known as MAIPARK, estimated in 2005 that just 2 percent of properties nationwide have earthquake cover, though insurance penetration rates are likely somewhat higher on the island of Java.
According to risk modeler Risk Management Solutions, the 7.6 magnitude quake caused the collapse of hundreds of buildings including hospitals, schools, markets, shopping malls and around 500 houses.
Additionally, the earthquake caused around 500 fatalities and many people are still thought to be trapped beneath the rubble, RMS said.
A second quake which hit Sumatra today was said to be in a central mountainous region of relatively low population density.
"According to the [U.S. Geological Survey] Shakemap, parts of the island of Sumatra nearest to the epicentre (including the city of Pedang) could have experienced intensity VII-VIII (very strong-severe) shaking on the Modified Mercalli Intensity scale. This level of shaking would be expected to result in moderate/heavy to heavy damage to property which is consistent with initial damage reports," said RMS regarding the first quake to hit.
That earthquake occurred about 30 miles west-northwest of the coastal city of Padang, which has a population of 900,000.
A smaller earthquake also occurred around 130 miles from Padang, but RMS said there were no initial reports of property damage. But the risk modeler noted that communication lines and infrastructure had already been severely crippled from the first quake.
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