Economic losses from Venezuelan earthquakes projected to exceed US$10 billion – Verisk

Verisk's Catastrophe and Risk Solutions group flags unusual uncertainty in translating economic losses into insured claims The Catastrophe and Risk Solutions group at Verisk estimated that economic losses from the June 24, 2026, earthquakes in Venezuela will likely exceed US$10 billion. The more consequential observation for the insurance market is not the economic loss figure but the degree of uncertainty in determining what proportion of it is insured - higher than typical, Verisk said, because of Venezuela's macroeconomic conditions, elevated inflation, low insurance penetration and sanctions-related market complexities. A rare earthquake doublet along an active plate boundary On June 24, Venezuela was struck by a rare earthquake doublet near Yumare-Morón in Yaracuy state, roughly 100 miles west of Caracas. A magnitude 7.2 foreshock was followed just 39 seconds later by a magnitude 7.5 mainshock - the strongest earthquake to affect Venezuela since 1900. The shallow strike-slip rupture occurred along the San Sebastián fault system, within the tectonically active boundary zone between the Caribbean and South American plates, and was followed by more than 430 recorded aftershocks. The confirmed death toll has continued to climb. As of July 1, Venezuela's National Assembly president reported more than 2,290 confirmed deaths and over 11,200 injuries, with tens of thousands of people still unaccounted for. The United Nations said the toll is likely to keep rising as search and rescue operations continue. Satellite analysis estimated that close to 59,000 buildings were damaged or destroyed nationwide. Damage was most severe in the Caracas metropolitan region and the coastal state of La Guaira, where Verisk estimates roughly 1,400 buildings were destroyed. Significant destruction was also reported across Aragua, Carabobo and Yaracuy states. Communities including Puerto Cabello, Catia La Mar, Maiquetía, San Felipe, Los Teques, Petare, Valencia and Baruta experienced severe shaking, according to US Geological Survey intensity estimates. Building stock and seismic vulnerability The majority of residential buildings in Venezuela's urban areas are constructed of masonry - including reinforced, confined and unreinforced masonry structures - while reinforced concrete is the predominant construction type in mid- and high-rise residential buildings in major urban centres such as Caracas. Although modern engineering standards exist, seismic performance has varied significantly due to local construction practices, material quality and inconsistent enforcement of building codes. Post-event structural assessments in Caracas and La Guaira have identified code enforcement failures as a contributing factor to the scale of building failures observed. Elevated uncertainty in the insured loss estimate Verisk's model introduces greater-than-typical uncertainty for several reasons specific to Venezuela. Assumptions around earthquake insurance take-up rates, ongoing inflationary pressures and the challenge of accurately valuing insured assets amid a rapidly shifting economic environment all affect the insured loss range materially. The industry operates under elevated inflation, currency depreciation, regulatory complexity and limited market capacity - conditions that mean variations in coverage levels and insured property values can shift the ultimate insured share of the US$10 billion economic total significantly in either direction. US sanctions targeting Venezuela's government and financial system add a further and less easily modelled complication. In past Venezuelan catastrophe events, sanctions have disrupted the flow of international reinsurance capacity and claims payments into the country - affecting not just whether insured losses are recoverable but how quickly they are settled. That settlement timeline uncertainty is distinct from the penetration and valuation uncertainty Verisk identifies, and together they make the insured loss estimate for this event more difficult to bound than a comparable earthquake in a less constrained market would be. The modelled insured loss estimates exclude losses from fire-following, landslides, sprinkler leakage, loss adjustment expenses, damage to uninsured properties or infrastructure, extra-contractual obligations, hazardous waste cleanup, vandalism and civil commotion. They also exclude civil engineering, marine cargo and hull, aviation, transit warehouse and personal accident risks.