Following the devastating earthquakes that struck Morocco and Turkey in 2023, Swiss Re paid well over USD 500 million in claims, providing funds to areas where they were most needed in a timely manner.

On the morning of 6 February 2023, a magnitude 7.8 earthquake shook southern Turkey and Syria, followed by a 7.5 magnitude quake nine hours later. The earthquake sequence resulted in the collapse of thousands of buildings and caused over 50 000 deaths and 100 000 injuries.

The financial losses also proved extensive. However, the Turkish insurance system was well prepared to respond, having already established a government insurance programme to deal with earthquakes.

After 1999's earthquake in the Kocaeli Province, the Turkish government prepared for the financial impact of property loss following future catastrophes. It created a compulsory earthquake insurance system for residential buildings on registered land in urban areas, providing a basic insurance cover for millions of people.

"The threat of major earthquakes has long been a concern of Turkey’s government," notes Esther Baur, Head Europe, Public Sector Solutions (PSS). "Almost 70% of Turkey’s population and 75% of its industrial facilities are vulnerable to large-scale earthquakes. That’s why in 2000, the Turkish government partnered with the insurance industry."

This collaboration resulted in the creation of the Turkish Catastrophe Insurance Pool (TCIP). Over the years, Swiss Re has become a leading reinsurance partner for TCIP. "I’m proud of this partnership," notes Esther. “We helped grow an insurance pool covering people that would normally not have this support. In 2023, we were there for these people when it mattered the most. More than 500 000 households received a payout.”

Before the establishment of TCIP, earthquake insurance in Turkey was mostly provided as an allied peril to the fire and engineering policies. "The penetration rate was quite low – only 5% coverage of residential buildings," Esther recalls. "But by spreading insurance and risk awareness to the public, it jumped to 60% earthquake insurance penetration country-wide – one of the world’s highest rates."

Hand in hand with reinsurance clients

Swiss Re's PSS group has also supported the core reinsurance work at Swiss Re since its establishment in 2011. Turkey represents one of PSS's original flagship markets, as well as an important market for P&C Re in the region for over a century.

Anna Ziswiler, Market Head Switzerland & Mediterranean, explains: "Swiss Re has been sharing risk with insurers in Turkey since 1912, with some individual client relationships enduring for nearly a century. Honouring our long-standing commitment to the market and our clients was a priority – we wanted to be there as Turkey faced one of the largest natural catastrophes in its history."

When the earthquakes struck in February 2023, Anna’s team launched a response to ensure claims support was available early. "We soon realised the extent of the damage," recalls Anna. "In our role as a leading reinsurer in Turkey, we felt this was our moment of truth."

The team was well prepared: with expertise in the market and close relationships with clients and brokers, it had substantial access to potential loss information and developments.

"Our understanding of our clients helped us get claims payments to them quickly, at times even within 72 hours," Anna explains.

Swiss Re's team was also present on the ground in the weeks following the earthquakes and contributed to industry discussions, sharing best practices and insights from other markets. It was a strong group effort across functions, from our natural catastrophe specialists to underwriting and claims experts.

"Having our teams available for clients and sensitive to what they were going through was key,” notes Anna. “In the face of such a devastating event, we benefitted from our solid preparation and follow-through."

Anna's team supported payouts of over 500 000 claims, stemming from over a dozen clients, including insurers, local reinsurers and TCIP, and delivered much-needed support to disaster-struck insureds. "Reinsurance is fundamental to the long-term reconstruction of society after devasting events," Anna reflects.

Swiss Re's support for the Turkish community went beyond the claims paid. Through a partnership with Médecins Sans Frontières and in collaboration with local partners, Swiss Re Foundation supported the provision of medical care. The Foundation also ran a donation programme to support Better Shelter. The Better Shelter programme offered temporary dwelling for those rendered homeless by the earthquakes.

Moroccan solidarity

On 8 September 2023, a magnitude 6.8 earthquake struck near the town of Oukaïmedene in western Morocco. According to the US Geological Survey, over a million people were directly exposed – with 2 960 people killed and 5 800 injured. Economic losses were estimated at 8% of Morocco’s entire GDP.

Like Turkey, Morocco's government had already recognised the dangers of disaster risk and had implemented a system of public-private partnerships to pre-finance their response to earthquakes.

Erik Payen from Swiss Re's PSS team worked closely with the Moroccan government to set up their catastrophe risk insurance programme. "Until the Al Hoceima earthquake in 2004, public policies relating to recovery and reconstruction were mostly based on ad-hoc approaches put in place after disasters," Erik explains. "They lacked a mechanism for dedicated pre-funding."

The government subsequently developed a two-pillar system. A National Catastrophe Insurance Pool was established to support people holding private insurance contracts with full protection against catastrophic risks. Meanwhile, a Solidarity Fund was created to provide cover for the uninsured and most vulnerable members of society.

"The Solidarity Fund is very important for households outside the private insurance safety net," notes Erik. "Because it provides an example for those families to understand the value of moving to private insurance for more comprehensive coverage. It is an excellent example of how to complement private insurance covers with a government programme."

Erik's work complements the larger P&C Re activities in Morocco. From engineering to energy and property lines, P&C Re provides a broad range of cover to Africa’s second-largest insurance market.

Nicolas Christinet, P&C Re's Regional Manager for North Africa, oversees Swiss Re's Moroccan clients and regularly visits the country. Following the September earthquake, Nicolas' team acted to show support for the local insurers and brokers, as well as the public institutions.

"Morocco has a refined insurance system for natural catastrophes, which we support with capacity, know-how and innovative products like parametric insurance," explains Nicolas. "After the 2023 earthquake, we released a substantial payment to the Solidarity Fund within a few weeks. This is work we are proud of because we can directly see how insurance builds resilience."

In Turkey, Morocco and around 80 other countries globally, P&C Re and PSS have partnered to support government programmes. It is all part of the One Swiss Re strategic approach.

"Our work in Turkey and Morocco is a good example of how we have been developing strong public-private partnerships," Esther Baur adds. "It is rewarding to be part of solutions that address disaster risk reduction, increase social protection and fiscal risk management, and develop the financial market."