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Italy's Insurers Could Pay Up to $530 Million in Quake Losses

Posted on 08 Apr 2009

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Risk modeling firm AIR Worldwide reported that insurers may face up to 400 million euros ($530 million) in insured losses from the earthquake that struck Italy this week, killing 260 people and leaving 28,000 homeless.

Losses to residential, commercial and industrial buildings and contents may range from 200 million euros to 400 million euros ($269.6-$530 million), AIR said in a statement. Insured losses will be lower than the total value of damage incurred “due to the low penetration of earthquake insurance in the region,” Guillermo Franco, a senior engineer at AIR said in the statement.

Most insurance policies are targeted at commercial activities and public buildings, while the majority of homes destroyed weren’t eligible for earthquake coverage, according to an analyst report by Milan-based Intermonte published yesterday. Assicurazioni Generali SpA, Italy’s biggest insurer, is among the most-exposed companies, the report said.

About 10,000 buildings have been damaged by the 6.3 magnitude quake that affected the central Italian region of Abruzzo on April 6. The total damage may be around 1.2 billion euros, according to the Italian government.

AIR analysts say the total damage may reach 3 billion euros.