The Swiss Seismological Service (SED) registered yesterday (Monday, 2017-03-06, 21:12 local time) an earthquake with magnitude M4.6. The epicenter occurred in Central Switzerland near Linthal in the Kanton of Glarus at a depth of 5 km in a rather unpopulated area. The SED cannot exclude that this quake was a precursor of a bigger one, however this is considered unlikely.
The quake was widely felt in Switzerland and also felt abroad. Nevertheless, the damage to houses will be limited and severe damages with even collapsed buildings, as we have seen last year in Italy, can be excluded. However, some people will report to their insurance company minor damages like cracks in walls or fallen roof tiles. And it will be at this point that some citizens will realize that their building is one of over 75% of private buildings in Switzerland, which have no earthquake coverage.
A recent Swiss Re study (english, german) shows that a magnitude 6.2 earthquake in central Switzerland can lead to a total loss of CHF 17.6 billion. This loss would occur in an area, where on average only 8.5% of private property is insured. Moreover, the study also estimates potential mortgage defaults banks would have to bear. And 80% of it will be borne by cantonal and local banks with a local footprint. The study highlights that an insurance protection gap – in this case earthquake protection gap – is as much an advanced as an emerging market problem. Switzerland, with its highly developed insurance culture, is unfortunately no exception.
Figure source: Swiss Seismological Service (SED)
Category: Climate/natural disasters: Disaster risk, Earthquakes, Resilience