Earthquake Istanbul – preparing for the next big one to come

When an earthquake hit Ecuador on 20 April 2016, it took the lives of over 570 people, injured over 1700 and left many more homeless. It also affected the lives of 15.6 million fellow citizens. Ecuador is sparsely populated compared to the Turkish metropolis of Istanbul with its 14.3 million inhabitants in an area of seismic activity similar to that of Ecuador. So how well prepared is Istanbul for the next big one? In its newest publication, "Is the insurance industry ready for the next big earthquake? A close look at Istanbul" Swiss Re experts investigated.

A city at the edge of a fault

Due to its geographical location close to the Northern Anatolian fault, Istanbul is one of the most earthquake-prone cities worldwide. In most of Istanbul’s urban areas, an M 7.5 scenario would cause severe to violent shaking of up to intensity IX on the Modified Mercalli Intensity (MMI) scale.

The region west of the Bosphorus around the Ataturk airport is likely to experience the most severe shaking due to its proximity to the fault and the subsoil quality. A heavy earthquake would also cause the Istanbul Boğaziçi Köprüsü bridge to shake violently –  severely impacting traffic in the region in times of recovery. A 2011 study estimates that 300 000 buildings would be structurally damaged in such a scenario, with another 270 000 buildings reporting light, non-structural damage. The economic impact of such an event is huge, as our global ranking of cities under threat from natural disaster has shown.

Who picks up the bill?

The 1999 Marmara earthquake triggered economic losses of ~USD 20 billion, which would amount to USD 40–50 billion in today’s values. Only ~USD 1 billion (5%) was insured at that time. If an earthquake of similar magnitude were to strike Istanbul today, it would cause an economic loss of about USD 90–120 billion, Swiss Re estimates. Of this amount, the public sector would have to bear approximately USD 25–30 billion. In the publication “Risky Cities: Istanbul”, Swiss Re experts assess the potential impact of an M 7.5 earthquake on the Northern Anatolian fault for the city of Istanbul. Based on estimates and experience, such a scenario could cost the insurance industry USD 25–30 billion. We estimate that losses exceeding the reinsurance covers make up 25% of the total market loss – a big number to handle if disaster strikes. It clearly makes sense to review insurance and reinsurance covers in preparation for the next big earthquake in Istanbul.

How to prepare…

It is important to take into account the way different models reflect a variety of views on earthquake risk in Turkey as our newest publication shows. The models can help understand the exposure and create risk awareness based on which regional zoning laws and building standards can be adapted and enforced to avoid damage in the first place.

Lessons from previous events highlight the importance of being well-prepared for the “big one” and know how to respond to catastrophic events regardless of where and when they occur. Adequate resources, including emergency plans, need to be in place beforehand.

and how to bounce back

Preparation will help to get people back on their feet quickly following a catastrophe. Swift pay-outs are essential for rebuilding efforts, and the insurance industry needs to ensure it is prepared to respond effectively in such situations.

After all, we need the economic heart of Turkey to keep on beating – even if disaster strikes.

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