Earthquake Rapid Recovery Insurance

Loss payments within days after a devastating earthquake, to secure livelihoods and keep businesses running.

Overview

The parametric Earthquake Rapid Recovery Insurance (ERRI) provides loss payments to policy holders after a devastating earthquake to secure livelihood or to keep business running within days.

The product is designed as parametric insurance where the Insured Location is a circle with a defined radius around the Insured Address.

The Insured receives a payout within days when an earthquake is reported in the Insured Location in a relevant category.

The main benefits

  • 01No proof of physical loss to your property
  • 02No proof of loss to business income
  • 03Loss payment wired within days directly to the insured
  • 04Loss trigger based on data from the United States Geological Survey (USGS)
  • 05Transparent product administered through a best-in-class platform
  • 06Backed by a reputable reinsurer

How it works

Parametric insurance pays within days after an Earthquake.

The trigger and the payout are agreed before cover starts.

  1. Step 01

    Event measured

    The USGS publishes PGA Shake Maps after significant earthquakes. They report ground motion for Grid Points in the region affected by the earthquake.

  2. Step 02

    Agreed threshold met

    The highest PGA value reported for Grid Points in the Insured Location reaches a category that pays under the Event Coverage Table.

  3. Step 03

    Pre-agreed payout

    The loss payment is wired to the policyholder's bank account within days. No proof of physical loss is needed.

Shake Map of the Pacific coast of Mexico with ground acceleration bands around the epicentre and a circle marking an Insured Location.

Which value counts

The relevant earthquake category is the highest PGA value reported for Grid Points in the Insured Location, per Earthquake Cluster:

Hover over a rule to see it on the map

  • Only the Grid Points located in the Insured Location are considered
  • The highest PGA value among them sets the category

ExampleIn this example the highest PGA in the Insured Location is 0.61g, in the 0.6g–0.7g category, so the payout is 60% of the policy limit.

EXAMPLE SHAKE MAP · PGA IN g0.750.860.750.630.520.410.290.180.700.750.700.610.500.390.280.170.610.630.590.540.450.350.250.140.500.520.500.450.380.290.200.100.390.410.390.350.290.220.130.060.280.290.280.250.200.130.060.06CIRCLE: INSURED LOCATIONHighest: 0.61g → 60% payout

Event coverage

If an earthquake is reported in the Insured Location, loss payments are due based on the Event Coverage Table. There may be multiple payouts during the Policy Period; the maximum payout is capped at the Sum Insured.

PGA categoryPayout, % of policy limit
0g ≤ PGA < 0.2g—
0.2g ≤ PGA < 0.3g—
0.3g ≤ PGA < 0.4g5%
0.4g ≤ PGA < 0.5g15%
0.5g ≤ PGA < 0.6g30%
0.6g ≤ PGA < 0.7g60%
0.7g ≤ PGA100%

PGA: peak ground acceleration, in g

Policy terms

An example of the terms of an ERRI policy.

Insured Address
Address of client's property
Insured Location
Circle around the Insured Address
Policy Period
1 year
Peril
Losses from earthquake event
Event
A reported earthquake for which a PGA Shake Map is published for Grid Points in the Insured Location
Eligible Event
An Event with a PGA value sufficient to trigger a Payout Amount on the basis of the Event Coverage Table

Payout example

A shop owner in Manzanillo purchased an ERRI with a Policy Limit of $1,000,000. The Insured Location is a circle with a 10 km radius around the shop. The October 1995 earthquake was an Eligible Event.

Map for Scenario 1: the event and the Insured Location.

The maximum PGA value reported in the Insured Location was in the 0.6g–0.7g category. The shop owner received a $600,000 payout.

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