Global reinsurers will likely face exposures from a massive magnitude 7.1 earthquake that struck Mexico City on Sept. 19, Morgan Stanley said in a new research note.
This earthquake led to dozens of deaths and the toppling of a number of buildings. As Morgan Stanley noted, it is also the second earthquake to hit Mexico in about 2 weeks. On Sept. 7, a magnitude 8.1 earthquake struck the state of Chiapas, Mexico, leading to estimated insured losses ranging from $786 million to $1.1 billon, according to AIR Worldwide data cited by Morgan Stanley.
Morgan Stanley noted that a small portion of homes purchase earthquake coverage, which suggests a major vulnerability in Mexico City.
“In California, the percent of homes with earthquake coverage is in the low single digit range; in Mexico, sources indicate that it is even less,” Morgan Stanley noted.
It is early yet to estimate anticipated insured losses from the Mexico City quake, but Morgan Stanley noted they should be much higher than the Chiapas one, because a more populous area was affected by the event.
The two earthquakes add to “already high catastrophic losses from Hurricanes Harvey and Irma heightening the industry loss for the year,” Morgan Stanley said.