Haiti Earthquake to Cost Insurers Millions: Equecat

The earthquake that struck Haiti may have caused hundreds of millions of dollars in damages, according to risk assessor Eqecat, which will likely lead to losses even for insurers of well-designed buildings.

Eqecat said Tuesday hours after the magnitude 7.0 earthquake, whose epicenter was 10 miles from the capital of Port-au-Prince, that it was “very severe, and even well-designed buildings could expect damage from this event.

“Buildings in this region tend to be built with heavy materials (concrete, masonry) and with little or none of the lateral reinforcing needed for earthquake resistance,” Eqecat said.

An Eqecat spokesman said Wednesday that the company had no update to its estimate.

Eqecat provides modeling software to help insurers and reinsurers estimate potential losses from catastrophes.

Catastrophes can cost billions.

In 2005, Hurricane Katrina led to claims of more than $40 billion, making it the most costly natural disaster ever for the insurance industry.

The attack on New York’s World Trade Center in September 2001 cost insurers up to $60 billion.

Tuesday’s earthquake was the most powerful to strike Haiti in more than 200 years. The country is the poorest in the Western Hemisphere, and countless structures collapsed while others were severely damaged.

Thousands were feared dead Wednesday. President Rene Preval called the damage “unimaginable” and described stepping over bodies and hearing the cries of those trapped in the collapsed Parliament building.

Destruction in the capital was “massive and broad” and tens — if not hundreds — of thousands of homes were destroyed, a spokesman for the U.N. mission in Haiti said.

(Reporting by Jonathan Stempel and Lilla Zuill; editing by Maureen Bavdek, Lisa Von Ahn and Richard Chang)

Editor’s Note: For a list of organizations working to help the people of Haiti: http://www.interaction.org/crisis-list/earthquake-haiti