In a groundbreaking move for the insurance sector, Liberty Mutual Reinsurance (LM Re) has processed a parametric payment in response to a 5.8 magnitude earthquake that struck Peru. This innovative payout was activated by Safehub's sophisticated Shake Network, signaling a new era in natural catastrophe risk management. This event underscores the increasing adoption of data-driven parametric solutions to provide timely financial assistance in the aftermath of seismic activities.
Details of the Parametric Payout and Its Impact
On May 19th, 2026, a 5.8 magnitude earthquake rattled the Ica region of Peru, causing substantial ground acceleration across various client sites. This seismic event triggered the world's first-ever parametric payment facilitated by Safehub’s Shake Network, utilizing LM Re’s ShakeNet Parametric solution. The policy, brokered by Price Forbes Latam, leverages Safehub’s proprietary sensor network and the Global Earthquake Model’s (GEM’s) OpenQuake engine to deliver precise, localized shaking data. This advanced approach ensures prompt, clear, and objective payouts, significantly aiding emergency response and post-event recovery planning.
Both LM Re and Safehub emphasized that this parametric solution exemplifies the critical role of high-resolution earthquake impact data in commercial and governmental risk transfer programs globally. The client had procured this policy in October 2025 to supplement their conventional insurance coverage with a more agile response mechanism for catastrophic events. Despite the initial activation, the claim was processed and released within 21 days following the earthquake, demonstrating the efficiency of the parametric framework. The funds received are earmarked to cover immediate recovery costs for the affected client.
Jean-Christophe Garaix, Head of Parametrics and Agriculture at LM Re, highlighted the expanding potential of parametric insurance in addressing natural disasters. He noted that the swift payout in Peru showcases how such solutions can bolster disaster resilience, particularly in regions prone to seismic activity like Latin America. Andy Thompson, CEO of Safehub, echoed this sentiment, stating that the efficacy of parametric insurance hinges on the quality of its triggering data. He affirmed that Safehub's Shake Network, by delivering hyper-localized shaking data, provides the accuracy and speed necessary to support clients effectively, marking a pivotal advancement towards a more earthquake-resilient global society.
This successful payout follows the August 2025 launch of a new earthquake parametric insurance solution by LM Re and Safehub, which was designed to mitigate basis risk in parametric reinsurance policies.
The successful deployment of this sensor-triggered parametric earthquake payout by Liberty Mutual Re and Safehub offers profound insights into the future of disaster risk financing. It demonstrates a powerful shift towards proactive, data-driven insurance models that prioritize speed and transparency. This innovative approach not only accelerates recovery efforts for affected entities but also enhances overall societal resilience against natural catastrophes. The collaboration highlights the potential for technology to revolutionize the insurance industry, fostering greater certainty and efficiency when it is needed most. It serves as a compelling case study for other regions and perils, advocating for broader adoption of similar advanced parametric solutions to bridge protection gaps and build a more secure future.
