Venezuela’s back-to-back earthquakes on June 24, 2026, have generated an estimated US$6.7bn in direct physical damage. UN Development Programme (UNDP) estimates 1.7 million structures sit in affected areas and 8.6 million people were exposed to above-moderate shaking.

Insurance coverage is expected to cover only a small share of that total. Insurance Business framed the event as a textbook example of a severe protection gap, as there is multi billion economic damage with minimal insurance coverage. The cost for most of the damage is unaccounted for.

The number insurers should focus on 

UNDP is explicit that the estimated $6.7bn loss is attributable to “direct physical damage” (mainly buildings and assets). This excludes longer-run disruption and repair costs. The UNDP notes total economic impact often reaches 1.5x to 3x the direct damage cost. This means the ultimate damage costs could plausibly be far higher than the first headline number.

This has implications on insurers, even if insured losses are minimal, because the claims environment can still deteriorate, which raises loss expenses and business interruption (BI) durations on those risks that are insured.

Claims inflation risk: Power outages 

UNDP also reports an increase in power outages after the earthquake in several areas, based on reductions in night-time lighting.

This is an issue for insurers as power outages and limited access are classic grounding for BI claims. Insurers should check that their policy wording covers these situations clearly and be ready to assess damage using satellite data) when sites are hard to reach, following catastrophic events.

The growing protection gap in practice

Swiss Re’s Institute highlights a widening global protection gap, estimating it reached US$424bn in 2025. Venezuela’s earthquakes are a clear illustration of the impacts that the growing protection gap can have within a country that is experiencing severe loss, and limited coverage.

Following the event, insurers have an opportunity for growth, potentially using new approaches such as:

• Parametric quake covers, which pay out depending on the size and strength of earthquakes.
• Simple small-business packages with clear limits and deductibles.
• Public-private risk pools.

Consequences for insurers 

Insurers should pay close attention to BI losses, because lost trading time can cost more than repairing the building, particularly if the consequences of the earthquake make rebuilding take longer. Insurers should also check whether their wording clearly explains whether closely timed earthquakes are treated as one event or two. 

Finally, insurers will want to consider assessing rating to take account of the higher risk in older buildings that haven’t been strengthened, especially where construction quality is poor.