In this article, we will be navigating through the economic impact of earthquakes, major earthquake insurance providers, and the 25 most earthquake-prone countries in the world. If you wish to skip our detailed analysis, you can move directly to the 5 Most Earthquake-Prone Countries in the World.
Economic Impact of Earthquakes
As reported by CNBC on January 9, earthquakes and thunderstorms cost $250 billion in damages globally in 2023. Munich Re, a leading global reinsurer, revealed that insured losses for 2023 amounted to $95 billion. Previously, we have also covered some of the biggest reinsurance companies in the world. The statistics for losses in 2023 might not appear substantial but they are concerning, considering the fact that the total recorded losses are still high. The death toll from natural disasters in 2023 exceeded the annual average for the last 5 years. The devastating impact of earthquakes is evident from the fact that they took away the lives of 63,000 people in 2023 which accounts for 85% of the total deaths in the year.
The deadly earthquakes that struck Turkey’s southeast and Syria in February 2023 were considered to be the most destructive natural disaster of the year. Other than causing economic losses of $50 billion, the disaster ended up in more than 55,000 fatalities. Initially, the earthquake resulted in the loss of up to 1% of Turkey’s GDP in 2023, as reported by Reuters on February 16, 2023. The Turkish Lira hit a record low in February 2023. The earthquake was also referred to as the biggest contributor to insured and uninsured losses encountered in the first half of 2023, according to a media report by Reuters published on July 28, 2023.
Recently on January 1, an earthquake with a preliminary magnitude of 7.6 hit central Japan. CNBC reported that the earthquake was the strongest earthquake in the region in a period of more than four decades. A major tsunami warning was issued by The Japan Meteorological Agency (JMA). The Japanese government requested thousands to evacuate from the western coast of the country’s main island Honshu. While 30 buildings in Wajima were reported to have collapsed, jolts were also witnessed in the buildings based in Tokyo. Furthermore, an airport in Ishikawa was shut after cracks appeared on the runway.
Leading Companies Providing Earthquake Insurance Services
The insurance industry plays a significant role in limiting the loss from earthquakes. According to a report by Straits Research, the global earthquake insurance market is expected to grow to $167.6 billion by 2031, at a compound annual growth rate of 6.0% from 2023 to 2031.
Typically, earthquake insurance covers the dwelling, personal property, and living expenses in case living in the house is not possible as a result of the earthquake damage that the policy covers. Earthquake insurance is not usually a part of standard homeowners and renters insurance policies and needs to be purchased separately. Companies offering earthquake insurance include Chubb Limited (NYSE:CB), Tokio Marine Holdings, Inc. (OTC:TKOMF), and Swiss Re Ltd (OTC:SSREY). Let’s take a look at what these firms have been up to. You can also view some of the best earthquake insurance companies heading into 2024.
Chubb Limited (NYSE:CB) is one of the largest property and casualty insurance companies worldwide and conducts operations in 54 countries and territories. It helps protect against natural disasters including floods, wildfires, and hail. Simultaneously, the company offers various kinds of earthquake coverage depending on the state. On February 22, Chubb Limited (NYSE:CB) reported that climate disaster events were cited as a leading factor that guides insurance purchasing decisions for middle-market firms. Although more than half of these firms believe that they were completely or very prepared to respond to catastrophic incidents, short-and long-term catastrophe events such as natural disasters remain a significant concern for middle-market companies.
Tokio Marine Holdings, Inc. (OTC:TKOMF) is a multinational insurance holding company based in Japan, one of the most earthquake-prone countries. The company’s earthquake insurance covers earthquakes, volcanic eruptions, fire, and explosions following earthquakes and volcanic eruptions as well as tsunamis. The premium rate depends upon multiple factors such as the age of the facility, occupation, and region stage of construction. In this regard, Tokio Marine Holdings, Inc. (OTC:TKOMF) doesn’t cover loss or damage to property caused by civil commotion, any act of terrorism, military power, sabotage, or subversive acts.
Swiss Re Ltd (OTC:SSREY) is a renowned provider of reinsurance and insurance. The commercial insurance arm of the company, Swiss Re Corporate Solutions, served as the first insurer that offered parametric earthquake insurance through compact seismographs. On February 28, Swiss Re Ltd (OTC:SSREY) reported that the Philippines and the United States are the most economically exposed to weather-related natural catastrophes. While 3% of the GDP of the Philippines gets lost to weather perils, the US encounters an annual economic loss of $97 billion from such events. You can also take a look at the most dangerous states for natural disasters in the US.
Without further ado, let’s move to the 25 most earthquake-prone countries in the world.
25 Most Earthquake-Prone Countries in the World
Our Methodology:
In order to compile a list of the 25 most earthquake-prone countries in the world, we acquired data regarding the earthquake occurrence from the Earthquake List. To demonstrate how vulnerable a country is to earthquakes, we sourced the total earthquakes with a magnitude of 4 or above which had their epicenters within 300 kilometers of the country. The data was taken from the most recent year, 2023. Our source uses two primary official databases for summing up earthquakes for every country and updating the records daily. The data for the European countries has been gathered from the European Mediterranean Seismological Centre’s (EMSC) country profiles for 2023. The second database belongs to the United States Geographical Survey (USGS) earthquake catalog.
The 25 most earthquake-prone countries in the world have been ranked in ascending order of their total earthquakes in 2023.
25 Most Earthquake-Prone Countries in the World
25. Uzbekistan
Total Earthquakes (2023): 197
On average, Uzbekistan records 169 earthquakes per year. In 2023, 197 struck within 300 kilometers of the country. Hence, Uzbekistan ranks among the most earthquake-prone countries in the world.
24. Kyrgyzstan
Total Earthquakes (2023): 214
1,922 earthquakes having a magnitude of four or above were encountered by Kyrgyzstan in the last decade. In 2023, 214 earthquakes hit the country. Hence, Kyrgyzstan is another earthquake-prone country in the world.
23. Pakistan
Total Earthquakes (2023): 221
221 earthquakes were seen to occur within 300 kilometers of Pakistan in 2023. In the preceding 10 years, the country remained victim to 2,412 earthquakes in total.
22. Timor-Leste
Total Earthquakes (2023): 243
Timor-Leste is an earthquake-prone country in Southeast Asia. In 2023, the country recorded 243 earthquakes with a magnitude of 4 or above.
21. Russia
Total Earthquakes (2023): 253
In 2023, 253 earthquakes hit within 300 kilometers of Russia. The country remains exposed to earthquakes since it has a yearly average of 211 earthquakes per year.
20. Honduras
Total Earthquakes (2023): 270
Honduras is a Central American country that encountered 270 earthquakes in 2023. 2,531 earthquakes were recorded within 300 kilometers of the country in the last 10 years.
19. India
Total Earthquakes (2023): 275
India encountered 275 earthquakes in 2023. In the last decade, 2,780 total earthquakes having a magnitude of four or greater have hit within 300 kilometers of the country.
18. Nicaragua
Total Earthquakes (2023): 299
Nicaragua is based in Central America and is prone to earthquakes. On average, the country witnesses 260 earthquakes per year which explains the extent of earthquake vulnerability.
17. Iran
Total Earthquakes (2023): 304
Iran is another Asian country that saw numerous earthquakes in 2023. 304 earthquakes hit within 300 kilometers of the country in 2023.
16. El Salvador
Total Earthquakes (2023): 338
On average, 316 earthquakes hit El Salvador per year. The country recorded 338 total earthquakes in 2023.
15. Tonga
Total Earthquakes (2023): 353
The island country of Tonga is vulnerable to earthquakes. In 2023, 353 earthquakes struck the country.
14. Tajikistan
Total Earthquakes (2023): 356
Tajikistan is a country in Central Asia which faces the risk of earthquakes. The country recorded 356 earthquakes in 2023.
13. Argentina
Total Earthquakes (2023): 402
In 2023, 402 earthquakes hit within 300 kilometers of Argentina. Therefore, the country is one of the most prone to earthquakes.
12. Afghanistan
Total Earthquakes (2023): 414
Among all other countries, Afghanistan was one of the most hit by earthquakes in 2023. The country witnessed 414 earthquakes during the year.
11. China
Total Earthquakes (2023): 473
China faces 427 earthquakes per year, on average. In 2023, 473 earthquakes were recorded within 300 kilometers of the country. Hence, China is another earthquake-prone nation.
10. Peru
Total Earthquakes (2023): 579
Peru remains vulnerable to earthquakes. The country recorded 579 total earthquakes in 2023. On average, 561 earthquakes are witnessed by the country per year.
9. Syria
Total Earthquakes (2023): 739
In 2023, Syria recorded 739 earthquakes. On average, the country encounters 99 earthquakes per year and is exposed to earthquakes.
8. Guatemala
Total Earthquakes (2023): 759
Within 300 kilometers of Guatemala, 759 earthquakes hit in 2023. The country has a yearly average of 581 earthquakes per year and ranks among the most earthquake-prone countries in the world.
7. Papua New Guinea
Total Earthquakes (2023): 818
Papua New Guinea is another earthquake-prone country. The country witnessed 818 earthquakes in 2023. On average, 829 earthquakes hit Papua New Guinea every year.
6. Turkey
Total Earthquakes (2023): 877
Turkey ranks among the countries most prone to earthquakes in the world. In 2023, the country encountered 877 earthquakes in total. The earthquake which hit the country in February 2023 was a massive one, with a magnitude of 7.8.
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Disclosure: None. 25 Most Earthquake-Prone Countries in the World is originally published on Insider Monkey.