On 14th August, a 7.2 magnitude earthquake struck Haiti, killing over 2,000 people and injuring thousands more, high winds and rain from tropical storm Grace have hampered rescue efforts to locate hundreds of people who remain missing. Over 10,000 structures have been destroyed, a large portion of them being residential properties in the cities of Les Cayes and Jeremie in the south-west of the country. The earthquake’s epicentre was located approximately 78 miles from the country’s capital Port-au-Prince, which has emerged relatively intact from the earthquake. This is in contrast to the devastating earthquake in 2010 that had an epicentre 45 miles closer to Port-au-Prince and caused widespread damage to the capital, causing catastrophic damage to hundreds of thousands of buildings and critical infrastructure and is estimated to have killed over 100,000 people
Catastrophe risk modelling company Karen Clark and Company have estimated the economic damage of the event to be $1.7bn, with an insured loss of just $250m, given the low level of insurance penetration in the country. The Government of Haiti is set to receive a record pay out of $40m from the parametric earthquake cover they have with the Caribbean Catastrophe Risk Insurance Facility, the world’s first multi-country risk pool.
Alpha comment: despite the appalling loss of life and devastating property damage, the impact on the global insurance industry is likely to be small, with little falling on the Lloyd’s market.