The University of California has partnered with Liberty Mutual Re and Safehub to implement a novel sensor-based parametric earthquake coverage. This initiative aims to improve the accuracy and speed of claims processing following earthquake events through the deployment of 180 sensors across UC campuses, enhancing both damage assessment and emergency response capabilities.
The University of California (UC) has introduced an innovative parametric earthquake coverage policy through a collaboration with Liberty Mutual Reinsurance (LM Re) and Safehub. This partnership aims to enhance the speed and accuracy of earthquake-related payouts on campus. California, known for its high asset value and susceptibility to natural disasters such as wildfires and earthquakes, presents a unique challenge to insurance coverage. Liberty Mutual Re, a segment of the Liberty Mutual Insurance Group, and Safehub, renowned for its advancements in seismic sensor technology and risk management, have implemented a sensor-based solution that employs a network of 180 sensors across various UC locations. These sensors monitor peak spectral acceleration (PSA) values, which serve as the basis for triggering and settling claims. Notably, the number of Safehub’s sensors installed at UC campuses surpasses the total number of earthquake sensors throughout the state of California, showcasing a commitment to precision in damage assessment. This innovative product circumvents reliance on generalized estimates from public entities, significantly lowering the associated basis risk typically linked to payout determinations. Consequently, the University of California anticipates expedited claims processing, thereby enabling quicker access to funds following seismic events. In addition, the integration of these sensors provides UC with near-real-time data regarding potential damage, enhancing the institution’s emergency response capabilities. Jean-Christophe Garaix, Head of Agriculture and Parametrics at LM Re, expressed his enthusiasm regarding the initiative, noting, “We are delighted to partner with Safehub to provide the University of California with sensor-based parametric earthquake coverage, offering unparalleled protection to earthquake damages. Our goal is to expand our reach to provide policyholders worldwide with this comprehensive solution, building on the success we have had in Mexico and the Caribbean.” Furthermore, Andy Thompson, CEO of Safehub, highlighted their commitment to supporting UC’s earthquake recovery efforts, stating, “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.”
This initiative is particularly relevant given California’s historical vulnerability to earthquakes and the challenges associated with assessing and compensating for damage. Traditional insurance methods often rely on public agency data which can lack specificity, leading to inefficiencies in claims processing. By utilizing cutting-edge sensor technology, this new parametric insurance product promises to significantly enhance the accuracy and timeliness of damage evaluations following seismic events, marking a significant advancement in how earthquake insurance operates within high-risk regions like California.
In conclusion, the collaboration between Liberty Mutual Re, Safehub, and the University of California signifies a pioneering step in the development of parametric earthquake insurance. By leveraging advanced sensor technology, this partnership aims to deliver more precise damage assessments and expedite the claims process, providing UC campuses with vital financial support in the aftermath of earthquakes. This model not only enhances the resilience of academic institutions but may also serve as a blueprint for future insurance solutions in similar high-risk areas.
Original Source: insurance-edge.net
