The inconsistent performance of buildings during the 2023 Kahramanmaras earthquakes in southern Turkey has again highlighted the issues of enforcement of the building regulations, according to a recent blog published by the Global Earthquake Team at Moody's.
The blog, which marked the 25th anniversary of the August 1999 Izmit Earthquake in Turkiye, is titled “How Did the 1999 Izmit Earthquake Shape Earthquake Risk in Turkey?” In it, the Moody’s Global Earthquake Team discusses the impact of the disaster on shaping earthquake risk in the country since the 1999 disaster.
The blog considers the immediate impact of the earthquake, revising building codes, legislative changes and development of the insurance market, imminent seismic risk, and building earthquake resilience in Turkiye.
The total economic losses from the earthquake were estimated to be around $20bn with the insured losses only at $900m.
Reviews of the 2023 Kahramanmaras earthquakes in southern Turkey highlighted the failure to enforce legislative changes, including revisions made in 2007 and 2018, set in place following the Izmit Earthquake. The economic losses caused by the Kahramanmaras earthquake are estimated at $105bn, of which the insurance sector covered only 5%.
Building code
The Izmit earthquake was pivotal for Turkey, exposing the need for enhanced seismic resilience from many perspectives.
For construction, the Turkish government reviewed the enforcement of their current building code after the earthquake, which they revised in 2007 and again in 2018.
However, discrepancies remained and it was estimated that more than 50% of structures were not compliant with building regulations in 2010. Turkey’s Chamber of Commerce estimated that around 65% of all new buildings were either built without a permit or had a lenient inspection.
CAT risk insurance pool
From a financial perspective, the government established a property catastrophe risk insurance mechanism—DASK (Dogal Afet Sigortalari Kurumu), the Turkish Catastrophe Insurance Pool (TCIP)—after the earthquake, as part of a larger effort to combat the impact of natural disasters.
According to the TCIP annual report published in 2000, there were an estimated 159,301 earthquake policies. As of August 2024, the number of policies exceeded 11.2m, covering 56.4% of residences within the country.
In Kocaeli, the province most impacted by the 1999 event, the penetration rate is up to 68.6%; a higher-than-average rate that can also be seen in other provinces that have experienced large earthquakes. The current penetration rate in Istanbul is 62.8%.
Before the introduction of the TCIP, residential insurance take-up was in the low single digits, making most people dependent on the government.
Building earthquake resilience
As of 2023, 77.5% of the country’s total population of 85.3m live in urban areas, and 20% reside in Istanbul; approximately 15.85m residents. A repeat of the 1999 Izmit earthquake would cause substantial damage across the Marmara region due to the increasing exposure, says the blog.
Looking beyond Izmit, there is a high potential for other large-magnitude events to occur along the North Anatolian Fault (NAF). Given the seismic landscape in Turkey, it is important to acknowledge that another significant earthquake is inevitable in this region. The question is not if, but when, such an event will occur.
In response to the 1999 earthquake, actions have been taken to improve the seismic performance of buildings and infrastructure through updated building codes and the establishment of the TCIP.
However, the losses from the 2023 Kahramanmara earthquakes in southern Turkey showed the persisting building stock deficiencies and gaps in insurance penetration.
The next significant earthquake will serve as a critical test of seismic preparedness, disaster response, and the overall resilience of the region. The role of the insurance industry will be essential in aiding recovery.