We cover clients’ earthquake exposure in all sectors, offering full flexibility and swift payouts for:
public infrastructure, such as roads, bridges, or dams
industrial buildings
strategic supply chain assets
underground networks & utilities
high value property
Information required
Statement of values (SOV)
All information pertaining to the location, i.e: GPS coordinates, build, construction, roof covering etc.
Historical loss records
Information about past earthquake events (e.g. losses, years) to help calibrate the model
Budget & sum to be insured
Parametric structures are infinitely flexible, and we strive to match the client’s budget
Risk engineering report (if available)
Report assessing the assets’ vulnerability to the peril
Acute earthquake risk left uninsured by traditional policies
With California being the most vulnerable state to the earthquake risk, earthquakes cost approximately $4.4 billion in the US annually. Although the Northridge quake in 1994 is still the costliest earthquake event on the US record, many cities and states in the US are experiencing earthquakes and their follow-up events, such as tsunamis, landslides, great and small, almost every year.
While earthquakes are recognized as the deadliest natural disaster in history and as one of the perils that have caused huge material losses over the past two decades, less than 20% of earthquake related losses were covered by insurance. This can be explained with accumulated asset concentration in cities since traditional insurers cannot provide enough capacity to cover higher-value assets. Lack of loss history due to no technology available in the past and low occurrence frequency are also reasons that earthquake risk is not properly insured by traditional policies.
Data-Driven solutions: Descartes’ innovative approach
Utilizing highly advanced technology and partnering with data providers, Descartes’ data scientist team monitors the evolving earthquake risks in near real-time. This data-driven approach allows us to offer transparent and economical solutions. Once the magnitude hits the predetermined threshold, it directly leads to pay-out so that our clients can financially bounce back faster than ever.
Parametric insurance revolution: tailored coverage for your business needs against earthquake exposures
Descartes’ parametric insurance has emerged as an innovative risk transfer solution for earthquake risks to fill the gap left by traditional insurance. Corporates and public entities are provided with the insurance products modeled and customized to the specific earthquake risk they are exposed to respecting their budget.
case study example
Parametric insurance in action
On April 18, 1906 a magnitude 7.9 earthquake hit the San Francisco Bay Area
Solution
In this highly earthquake exposed region, for this event the parametric cover would have provided the client the followng:
Result
Client location: sum insured USD 100M, impacted by PGA (peak ground acceleration) = 1.11g
The client would receive USD $60M
