AM Best expects the impact of a recent earthquake centered near Panama on the countrys insurance industry will remain contained, due largely to the low impact of the event coupled with low insurance penetration in provinces closest to the epicenter.
On May 12, 2019, a 6.1-magnitude earthquake struck a lightly populated region of Panama near the border with Costa Rica, with the epicenter approximately 30 miles northwest of the coastal city of David. Few people were injured because of the earthquake, with minimal damaged reported to some houses, shops and sports facilities. Published reports said the tremor was felt in central areas of Panama.
In a Bests Commentary, titled, Minimal Insurance Losses Expected from Panama Earthquake, AM Best states that it expects damages to infrastructure and housing to be limited and remain concentrated in the provinces closest to the epicenterChiriqu and Bocas del Torowhere insurance penetration is low. Therefore, no large claims are expected for the countrys insurance industry. At year-end 2018, catastrophic and statistical deviation reserves stood at USD155 million, which represented approximately 13% of adjusted total industry capital.
While it is still too early to measure the total economic or insured losses derived from this event, AM Best expects net losses after reinsurance to impact results marginally, due to conservative catastrophe risk retention among insurers. AM Best will continue to assess the impact of this event, including its impact on the balance sheets of rated insurers.
To access a copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=285739.
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