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January 26, 2021
BUSINESS

PAID to pay damage compensations worth EUR 190 M if 1977 like tremor strikes

A seism of a magnitude similar to that which rocked Romania in 1977 could result in a number of 30,520 damage compensations being paid from the National Disaster Insurance Pool (PAID), amounting to nearly EUR 190 M, Mediafax quoted Marius Bulugea, the company’s general manager, as saying.Bulugea also said that the compensations could go as high as 3.5 bln euro if the country’s entire housing fund were insured by PAID-issued premiums. “On the other hand, an estimate by one of the brokers involved with the PAID reinsurance program shows that the overall value of damage compensations could reach nearly EUR 201 M,” Bulugea also said.The broker in question used an independent Risk Management System model, whereas the PAID scenario is a linear projection of the effects caused by the 1977 earthquake. At a magnitude of 7.2 on the Richter scale, the tremor produced 32,900 total damages, of a total of nearly 750,000 damaged dwellings nationwide, worth USD 2 bln, Bulugea said.“Romania’s housing fund at the time totalled nearly 6.2 M dwellings all of which were insured as stipulated by law. Today, there are 8.4 M residences and 504,000 mandatory policies. According to PAID calculations, an earthquake of a size similar to that recorded in 1977 would cause 44,600 total damages nationwide out of nearly one million affected dwellings that would require repairs or consolidations,” Bulugea said.For Bucharest, the PAID model shows the total value would add up to EUR 64 M.

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