Economic Loss To Haiti Now Put At Billions

NU Online News Service

Revising its estimate upward, Eqecat catastrophe modeling firm said it now estimates economic damage from Tuesday's earthquake in Haiti to be in the low-single-digit billions of dollars.

The firm initially estimated that hundreds of millions of dollars might be involved. The Oakland, Calif.-based firm said it was increasing the figure "in light of the considerable humanitarian aid needed for recovery, in addition to the cost of reconstruction."

The cost of insurance losses is expected to be minimal with a property and casualty market in the country of just under $20 million.

Insurance penetration is extremely low at around 0.3 percent of Gross Domestic Product. The majority of Haiti's insured risks are situated in Port-au-Prince, and motor insurance accounts for 50 percent of all non-life premiums, according to Newark, Calif.-based Risk Management Solutions.

Eqecat's update said that since the 7.0 quake hit with its epicenter southwest of Port-au-Prince, there have been 43 aftershocks all occurring west of the initial shock.

Had the rupture that occurred been directed toward Port-au-Prince, the city would have experienced even more devastation, according to Eqecat.

The firm said the quake, on the Enriquillo-Plantain Garden fault system, which is oriented in the east-west direction just south of Port-au-Prince, ruptured only a portion of the fault, which increases the chances of another large earthquake in coming decades on the eastern portion of the same fault.

Eqecat explained this danger exists because stress relieved by a rupture is transferred to adjacent segments of the fault. If additional stress on the eastern segment of this fault were to trigger another earthquake, it could impact Port-au-Prince with equal or greater severity as the recent event.

The modeling firm said its catastrophe event set specifically includes earthquakes on the Enriquillo-Plantain Garden fault system.

Fatalities from this event could be in the tens of thousands, the company noted.

The Caribbean Catastrophe Risk Insurance Facility pool that Haiti belongs to has been triggered, and CCRIF said it would provide the country with a little under $8 million.