Guy Carpenter: Colombia quake to drive Latin American insured losses

Guy Carpenter expects Colombia's 10 August earthquake to become an insured-loss event for the broader Latin American market. The broker's assessment, first reported by Reinsurance News, rests on the country's unusually high earthquake insurance penetration. The magnitude 7.4 quake struck near San José del Palmar in the Chocó Department, about 250 miles west of Bogotá, at a depth of 107 kilometers. At least 181 people died, six airports suspended operations, and initial reports counted more than 150 buildings toppled.

Colombia is among South America's most seismically active countries, with at least 14 recorded earthquakes of magnitude 7.0 or greater. The quake follows major seismic activity in Venezuela in June, but Guy Carpenter expects the insurance implications to differ between the two countries. Earthquake cover in Colombia is often available for an additional premium, with deductibles commonly ranging from 5% to 20%. The high take-up rate, rather than any unusual intensity of shaking, is why the loss should spread across the region.

AM Best likewise expects claims across multiple lines, led by commercial and residential property. The rating agency sees low insurance penetration near the epicenter and no significant reaction from the reinsurance market. Guy Carpenter places the event within a broader pattern of significant seismic activity across South America in 2026. Damage assessments are still developing, so the final bill is unquantified. With deductibles of 5% to 20% and AM Best's read on thin cover in the rural impact zone, the loss will hinge on how far the shaking reached into well-covered cities. Whether any of it reaches the attachment points of collateralized reinsurance or cat bonds is unconfirmed.