Risky cities: Istanbul

Swiss Re takes a close look at the potential losses in Istanbul and points to further contributions the insurance industry can make towards strengthening financial resilience.

Istanbul needs no reminding of the seismic threat lurking beneath the Marmara Sea, known as the Northern Anatolian Fault. It was this weakness in the earth's crust that caused the very destructive earthquakes back in 1999 close to the cities of Izmit and Kocaeli. Since then, both the government and the private sector have taken substantial measures to strengthen urban resilience and to increase insurance penetration, not least of which was the establishment of the Turkish Catastrophe Insurance Pool for homeowners.

In a new publication entitled Risky cities: Istanbul, the latest in a series of factsheets analysing the natural catastrophe risks in a number of major cities across the world, Swiss Re experts highlight the potential loss scenario for a major earthquake hitting Istanbul. They also point to the further contribution the insurance industry can make towards strengthening financial resilience should such a scenario become reality.

Encouraging progress but protection gap still wide

In Istanbul's case, despite the best efforts of the private and public sectors, the protection gap remains very wide. Our experts estimate that should a major quake strike close to Istanbul, the total economic loss would amount to USD 90-120 billion, roughly three-quarters of which would still be uninsured. The government would be faced with emergency response and reconstruction costs as high as USD 30 billion.

In a telling infographic which compares the potential human impact of natural hazards in 10 major population centers across Europe, the Swiss Re paper estimates that, with 6.7 million people exposed, Istanbul would be top of the list. This is two million more than in Amsterdam-Rotterdam in second place and 2.7 million more than London, where people are exposed to flood and windstorm.

Given the exposure to catastrophe risks and the increasing asset concentrations in emerging economic centres such as Istanbul, the recommendations made by the publication's authors cover a broader redistribution of risk and a wider disaster financing mix, including government use of parametric insurance products. By directly insuring itself against seismic risks, the paper says, the government can "reduce its dependency on budget re-allocations and foreign debt financing."


Managing climate and natural disaster...

Re/insurance plays an important role in managing climate and natural disaster risk, and that's why it's part of Swiss Re's core business.

Read the whole story

Volcanoes – potential disasters...

The volcanic ash clouds of the 2010 eruptions of Eyjafjallajökull in Iceland cancelled 107 000 flights, stranded 10 million passengers and cost the airline industry alone USD 1.7 billion. But what if...

Read the whole story


Write a comment

Comment Policy
(All fields marked with * are mandatory)

In our ongoing efforts to improve the quality and relevance of our publications, we would like to know more about you.

*mandatory

Interested in subscribing to our content? Visit our subscription page

Remember me

We use cookies to gather information that will help us provide the best possible service. By using this site, you are accepting our cookie policy.

In our ongoing efforts to improve the quality and relevance of our publications, we would like to know more about you.

* required fields

Interested in subscribing to our content? Visit our subscription page.

Close
Close

Show local contact for:

SWITCHBOARD

  • Zurich +41 43 285 2121
  • MUNICH+49 89 3844 0
  • HONG KONG+852 2827 4345
  • LONDON+44 20 7933 3000
  • ARMONK+1 914 828 8000
Show Location

Subscribe to Newsletters

Subscribe to Newsletters