Best’s Commentary: Colombia Earthquake Expected to Generate Claims Across Multiple Lines of Business

MEXICO CITY--(BUSINESS WIRE)--An earthquake that struck the western part of Colombia this week is expected to generate insurance claims across several lines of coverage, particularly related to commercial and residential property claims, according to a new AM Best commentary.

The Best’s Commentary, “Colombian Earthquake Expected to Generate Claims Across Multiple Lines of Business,” notes that the full scope of insured losses from the Aug. 10 event remains subject to ongoing assessments and is not yet quantified.

AM Best notes that insurance activity in Colombia is concentrated geographically, with Bogotá, Medellín and Cali accounting for just over 80% of total insurance premiums, as of March 2026. Insurance activity near the 7.4 magnitude earthquake’s epicenter in the country’s Chocó Department region is relatively limited; however, damage has been reported in Cali, which accounted for approximately 9.5% of Colombia’s earthquake premiums over the same period. “The extent of damage in areas with higher insurance activity will be an important factor in determining the ultimate insured loss,” said Frida Garcia, associate financial analyst, AM Best.

Colombia is exposed to significant seismic risk given its location at the convergence of several tectonic plates. The Best’s Commentary also notes that the Colombia government has access to a USD 200 million Catastrophe Deferred Drawdown Option, approved by the World Bank in February 2025, providing an additional source of contingent liquidity to support the government’s response to natural disasters.

In June, AM Best maintained its market segment outlook for Colombia at negative, citing in part rising inflation and interest rates. While inflation in Colombia has decreased over the past few years, it is expected to increase due to pressures from the recent hike in the minimum wage, and other factors. “This could potentially drive up earthquake-related claims costs going forward,” said Inger Rodriguez, senior financial analyst, AM Best.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=367401.

To access the full copy of Colombia’s market segment outlook report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=365320.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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