Catastrophe risk modeling firm AIR Worldwide estimates that insured losses from Monday’s magnitude 6.3 earthquake that struck the Abruzzo region of Italy are likely to range between €200 million and €400 million ($264 to $528 million).
AIR said the “estimates include losses to residential, commercial and industrial buildings and contents. They do not include Business Interruption losses.” Total damages from the quake and the aftershock are now estimated at between €2 billion and €3 billion ($2.64 billion and $3.95 billion).
“While damage from this event will likely be between two and three billion Euros given the scale of destruction, insured losses will be limited due to the low penetration of earthquake insurance in the region,” explained Dr. Guillermo Franco, senior engineer at AIR Worldwide. “Damage to commercial properties will likely drive the insured losses, since a higher proportion of businesses tend to purchase earthquake insurance.”
AIR noted that the “earthquake occurred roughly 100 kms [60 miles] from a magnitude 6.0 earthquake that struck the Umbria-Marche region in 1997. According to a 2004 report from AXCO, the 1997 event caused an estimated $4.5 billion in economic losses of which less than 2 percent was insured.”
Dr. Franco added that, “while the geographic extent of damage was fairly limited—to L’Aquila and nearby towns—the severity of damage within the affected area was high. Research published in 2005 points at the possibility of ground motion amplification in the city of L’Aquila due to the existence of an underlying sedimentary basin. Once ground motion records become available, we’ll be able to discern whether this effect might have played a significant role in the destruction witnessed in this event.”
An estimated 15,000 buildings were damaged in Monday’s quake and tens of thousands of people have had to leave their homes while inspections are underway. In the nearby village of Onna, virtually every home was damaged or destroyed. Similar levels of destruction were reported in the nearby village of Tempera.
Dr. Franco continued: “The historic center of L’Aquila has been devastated and as expected, damage to unreinforced masonry (URM) buildings is severe. Narrow streets have been made impassable by the rubble of collapsed URM houses—many of them more than 100 years old. However, damage was not restricted to the oldest structures. Many reinforced concrete (RC) frame buildings dating from the 1960s and 1970s—and thus predating seismic code provisions—suffered heavy damage as well. Among these, the variability of damage is reported to be high, with one severely damaged next to another which appears to be intact. However, even newer RC frame buildings also suffered damage, and many exhibit gaping shear cracks in their walls.”
Following the catastrophic M6.9 Irpinia earthquake that killed 3,000 people in 1980, the Italian Government launched a research effort to advance the understanding of seismic hazard in the country. Construction codes were introduced that were intended to ensure that new construction would withstand ground shaking similar to that produced by yesterday’s earthquake. The codes were updated most recently in early 2008 to reflect the latest seismic hazard map published by Italy’s National Institute of Geophysics and Volcanology (INGV).
Aftershocks continue to strike the area, including a magnitude 5.6 that struck the ancient mountain-top village of Fossa. The initial earthquake on Monday likely weakened some buildings making them more vulnerable to the aftershocks.
AIR added that it will be sending a reconnaissance team to the affected area once search and rescue operations have ceased.
Source: AIR Worldwide – www.air-worldwide.com
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