Liberty Mutual Reinsurance (LM Re) and Safehub have joined forces with the University of California (UC) to provide an innovative solution aimed at protecting its campuses from earthquake damage.
The agreement, which marks the first sensor-triggered parametric earthquake coverage purchased in the US, comes as part of an ongoing effort by LM Re and Safehub to expand the reach of their technology-driven earthquake insurance products globally. According to a news release, the partnership builds on prior successes in Mexico and the Caribbean, where similar sensor-based insurance policies were successfully rolled out.
Under this policy, LM Re, with reinsurance support from Munich Re, will offer coverage that is triggered by real-time data collected from 180 seismic sensors installed across various UC campuses. These sensors, developed by Safehub, measure peak spectral acceleration (PSA) to determine the severity of an earthquake’s impact. When PSA values exceed a pre-set threshold, the system automatically triggers claims, allowing for quick and precise settlements based on actual earthquake conditions rather than relying on public estimates.
The news release highlighted that the UC system’s adoption of this technology not only ensures more accurate damage assessments but also offers quicker payouts for repairs and recovery in the event of an earthquake. The number of Safehub sensors being deployed across UC campuses has been described to have surpassed the total number of earthquake sensors currently installed statewide in California.
Jean-Christophe Garaix, head of agriculture and parametrics at LM Re, emphasized the significance of this partnership. “We are delighted to partner with Safehub to provide the University of California with sensor-based parametric earthquake coverage, offering unparalleled protection against earthquake damages,” Garaix said. “Our goal is to expand our reach to provide policyholders worldwide with this comprehensive solution.”
LM Re noted the technology not only aids in rapid claims processing but also provides near-real-time insights into building damage. The sensors offer UC officials critical data to enhance emergency response efforts following an earthquake, potentially reducing recovery time and costs.
Safehub’s CEO, Andy Thompson, expressed excitement about the partnership, saying, “Together with Liberty Mutual Re, we are excited to work with the University of California and its individual campuses to support the earthquake recovery of these prestigious academic institutions.”
In addition to the immediate benefits for the UC system, the partnership is also seen as a step forward in the evolution of parametric insurance.
Michael Roth, public sector practice lead at Munich Re Capital Partners, commented, “Munich Re is supporting and driving innovation in parametric risk transfer across the globe. Reducing the basis risk by using sensors in parametric insurance provides a robust value proposition.”
David Evans, senior vice president at Alliant Specialty, the broker responsible for the placement, added, “UC is an organization built on innovation and continuous improvement. By incorporating sensors into the earthquake insurance placement, they have gained real-time, critical building data across all campuses and med centers. This is expected to reduce disaster recovery times and costs and enhance the university’s resiliency.”
Do you have something to say about the new partnership? Feel free to share your comments below.
