Catastrophe Cover – Overview

The catastrophe cover is a stand-alone policy. Private insurance companies receive a fee for collecting catastrophe cover premiums alongside fire insurance premiums on behalf of NTÍ. For residential and commercial properties, the insurance value corresponds to the official fire insurance value (brunabótamat). For contents, the insured amount is based on an agreement between the policyholder and the private insurance companies on the value of the contents.

From 1 January 2025, the premium is 0.375‰ (0.0375%) of the insured value for properties and contents, and 0.3‰ (0.03%) for infrastructure. Premiums for private properties and contents are collected by private insurers against a collection fee, whereas premiums for public infrastructure are collected directly by NTÍ from the relevant public entities.

The policy only covers direct physical losses resulting from the natural catastrophes specified in the Act. A deductible of 2% of each loss applies, subject to a statutory minimum which is:

• ISK 400,000 (~EUR 2,670 as at August 2025) for properties
• ISK 200,000 (~EUR 1,335 as at August 2025) for contents and movable property
• ISK 1,000,000 (~EUR 6,670 as at August 2025) for public infrastructure

When an insured loss occurs due to one of the perils listed in the Act, losses are assessed by independent experts, and compensation is paid according to that assessment.

Exposure info – NTI covers assets of ISK 20,977 billion situated all over the country, as at August 2025.

Because of the compulsory nature of the insurance, assets from relatively low risk areas such as the capital region (60%) make up most of the portfolio. There are also notable exclusions from cover, such as the hydroelectric power plants in the central region, which are insured separately on a facultative basis.

Loss history – From 1987 - 2025, ICI has paid claims arising from 301 events: 152 floods, 82 avalanches, 42 rockfalls/mudflows, 22 earthquakes, and 3 volcanic eruptions. In 1995, villages and several farms in the West Fjords and East Fjords were hit by avalanches; the total loss paid by NTI, in present-day value, is about ISK 4.7 billion. In 2000, two Mw 6.5 earthquakes struck South Iceland, with paid losses totalling about ISK 12 billion. In 2008, an Mw 6.3 earthquake struck South Iceland; paid losses at present-day value are about ISK 23 billion. Most recently, an earthquake swarm driven by magma intrusion caused losses in Grindavík on the Reykjanes Peninsula, currently estimated at around ISK 10 billion.

• NTI Programme Summary