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Liberty Mutual Reinsurance (LM Re) part of Liberty Mutual Insurance Group, and Safehub, a provider of seismic sensor and risk management technology, have launched a new earthquake parametric insurance solution that will help reduce basis risk for parametric re/insurance policies.
One of the central challenges of parametric re/insurance is basis risk – the potential mismatch between a policy’s trigger and the actual losses experienced by the insured.
This new solution, ShakeNet Parametric, backed by capacity from Liberty Mutual Re, is reportedly triggered by the highest-resolution regional shaking data available globally.
“At the core of this product is Safehub’s ShakeNet, a global solution that combines data from Safehub’s increasingly dense network of proprietary sensors with existing government seismic networks to provide highly-localized regional shaking maps,” LM Re explained.
This data is then processed through the Global Earthquake Model (GEM) Foundation’s OpenQuake engine, an open-source hazard modelling framework.
By delivering more localised, science-backed shaking maps, ShakeNet Parametric can help reduce basis risk, ensuring payouts are more closely aligned with actual losses. This allows clients to benefit from the speed and transparency of parametric insurance without sacrificing reliability.
As well as this, the scalable nature of Safehub’s technology means sensors can be rapidly deployed and densified, enabling risk transfer solutions in regions with limited post-earthquake information.
Clients can also reportedly add sensors at specific sites to further tailor coverage to their exposure.
LM Re also noted that the product works effectively across large portfolios and can support public-private partnerships (PPPs) as well as sub-layer reinsurance structures.
The launch of this new product builds on LM Re’s 2024 exclusive partnership with Safehub, which aimed to deliver building a specific, sensor-based parametric earthquake re/insurance product to global clients.
Moreover, it has also been confirmed that LM Re has joined GEM as a sponsor, building on Safehub’s long-standing support of the foundation and reinforcing both organisation’s commitment to advancing earthquake risk modelling.
Jean-Christophe Garaix, Head of Agriculture and Parametrics at LM Re, commented: “By combining LM Re’s reinsurance expertise with Safehub’s advanced seismic monitoring and mapping technology, ShakeNet Parametric delivers resilient, science-backed insights that enable faster, smarter earthquake response. Our partnership with Safehub underscores LM Re’s commitment to bringing innovative, data-driven solutions to the evolving needs of our clients.”
Andy Thompson, CEO of Safehub, said: “Through our existing sensor networks, and our ability to quickly deploy into developing markets, we are able to provide the highest-resolution regional shaking maps anywhere in the world. In combination with LM Re’s reinsurance expertise, this technology delivers a new frontier in earthquake risk management.”
New LM Re & Safehub parametric earthquake insurance solution aims to reduce basis risk was published by: www.Artemis.bm
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