Thus far, the majority of coverage and concern over Haiti has been focused on the horrible human loss and suffering — and rightly so. In a country that simply can’t catch a break, the recent earthquake just seems like piling on.
And now, estimates of the loss in terms of dollars are beginning to roll in, and they aren’t pretty. According to catastrophe modeling firm Equecat, economic damage is estimated to be in the low-single-digit billions of dollars. Initially, estimates had been in the hundreds of millions of dollars but they have been raised considerably “in light of the considerable humanitarian aid needed for recover, in addition to the cost of reconstruction.”
The losses come on the heels of another string of earthquakes in 2008 that caused the Haitian economy to suffer a loss of $900 million. At that time, the losses equaled approximately 15 percent of Haiti’s gross domestic product.
On the other hand, insurance losses will likely remain low, due to the country’s property and casualty market of less than $20 million dollars. In fact, the country’s insurance penetration is only around 0.3 percent of Gross Domestic Product, as the majority of the country’s insureds are centered around Port-au-Prince, while motor insurance makes up 50 percent of all non-life premiums. Needless to say, the lower number is hardly reason for celebration.