Liberty Mutual Re offers sensor-based, parametric earthquake re/insurance worldwide – Artemis.bm
Liberty Mutual Reinsurance (Liberty Mutual Re) has announced a partnership with seismic sensor tech-provider Safehub to enable it to offer what it is calling a market-first, a building-specific, sensor-based, parametric earthquake re/insurance product that is available to clients globally.
The use of real-time sensors and their data to construct triggers and provide calculation inputs for accurate and tightly calibrated parametric insurance or reinsurance products, is a growing trend and one we first wrote about well over a decade ago.
Liberty Mutual Re is already a leader in this space, having announced a parametric reinsurance treaty for earthquakes that takes its trigger from installed sensor data provided through Safehub technology last year.
Now, the partnership is targeting single risks, building-specific earthquake coverage that can be triggered by data from sensors installed in the unit itself.
Today’s announcement builds on the success of a pilot programme in Mexico City, where this sensor-based parametric risk transfer solution has already been rolled-out for 23 strategic locations, with this offering now available worldwide.
What’s really interesting about sensor technology and its use in parametric insurance, is how, as sensors become increasingly ubiquitous, data can be collected from a defined array of sensors to provide wider-area coverage as well, such as for reinsurance treaties.
In addition, sensors could become particularly relevant for large buyers of earthquake insurance, with major corporate buyers able to protect specific sites and their employees using products such as this, in a similar use-case to Google’s much-discussed catastrophe bonds.
Jean-Christophe Garaix, Head of Agriculture and Parametrics at LM Re, explained, “We are delighted to partner with Safehub to provide our clients with sensor-based parametric earthquake coverage, offering unparalleled protection in earthquake-prone regions.
“This partnership underscores our dedication to delivering innovative (re)insurance solutions that address the evolving needs of our customers. Our goal is to provide policyholders with a comprehensive solution, offering quicker access to indemnification in the face of seismic events.”
Andy Thompson, CEO of Safehub, added, “We are excited to announce our exclusive partnership with LM Re. Earthquake damage is site-specific, with neighbouring buildings potentially experiencing vastly different levels of ground shaking. With this partnership, clients gain access to building-specific data, enabling a more precise alignment of (re)insurance payouts with losses, while also supporting emergency response efforts.”
