Insurance protection gap

The insurance protection gap is the difference between the total economic losses caused by an event or catastrophe and the share of those losses actually covered by insurance, a gap that reflects both the lack of insurance penetration within a given population and insufficient sums insured among those who are covered. The February 2023 earthquake in Turkey and Syria offers a striking illustration: according to reinsurer Swiss Re estimates, economic losses exceeded $100 billion, while insured losses were limited to roughly $5.5 billion, a coverage rate of about 5% despite the existence of a mandatory national catastrophe insurance scheme, DASK, whose coverage caps and actual take-up rate remained insufficient against a loss of that scale. This gap is a major concern for public authorities and the insurance industry alike, since post-catastrophe rebuilding then rests almost entirely on public finances or international aid rather than fast private indemnification, which explains the growing interest in parametric insurance mechanisms and public-private pools able to widen coverage without depending solely on individual take-up.

The February 2023 earthquake in Turkey causes over $100 billion in economic losses according to Swiss Re, but only about $5.5 billion is insured, a protection gap that leaves most of the rebuilding to fall on public finances.

protection gap, écart d'assurance, déficit de couverture