Magnitude 7.8 quake widens Philippine insurance gap

Insurers generally have less exposure in Mindanao than in Manila.

The magnitude 7.8 earthquake that struck off the coast of Sarangani is expected to result in a significant gap between insured and economic losses due to low insurance penetration in the Philippines.

Victoria Ohorodnyk, senior director, analytics at AM Best's Singapore office, said insurers generally have less exposure in Mindanao than in the country's main commercial centres, such as Manila. 

She noted that many homes in the Philippines remain uninsured, which is likely to widen the difference between insured losses and the overall economic impact of the disaster.

Ohorodnyk added that Philippine insurers rely heavily on the global reinsurance market to transfer earthquake risks.

The event could lead reinsurers to reassess their earthquake models and risk appetite, although she does not expect a significant change in appetite for regions that were not affected by the quake in the short term.

The comments came as the death toll from the earthquake rose to 37, according to the Office of Civil Defense (OCD).

OCD deputy spokesperson Diego Agustin Mariano said four deaths were recorded in Davao and 33 in SOCCSKSARGEN as of 6AM on Tuesday. The figures remain subject to validation.

The OCD said 18 deaths are being validated in Sarangani province, 12 in General Santos City and three in South Cotabato.

Earlier reports indicated that 144 people were injured and four were missing.

The earthquake struck at 7:37AM on Monday in the Celebes Sea. Initial assessments identified General Santos City as the worst-affected area.

As of 7AM on Tuesday, the Philippine Institute of Volcanology and Seismology had recorded 1,055 aftershocks, ranging in magnitude from 1.3 to 6.7.

The national government is working with local authorities in Sarangani to provide relief and assistance. The OCD said generators and fuel will be deployed to hospitals to help maintain medical services.