Customer Case Study: Parametric QUAKE
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Our customer, the State of Utah, first bought a parametric earthquake policy from us in 2017 and has had the coverage ever since.
Each year, the Utah region experiences about 700 earthquakes (including aftershocks.) Most of those events produce no visible shaking, but approximately 2% of those earthquakes are felt. An average of 13 earthquakes of magnitude 3.0 or larger occur in the region every year. Earthquakes can occur in any part of the state.
On 18 March 2020, at approximately 7:09 am local time, the Salt Lake City area was hit with a 5.7 magnitude earthquake. With its concentrated shaking, the state’s strongest earthquake in nearly 30 years caused significant economic loss. In addition, the event happened during the global COVID-19 pandemic that had already hurt the region's economy.
The state's main objective was to supplement their traditional earthquake insurance and cover deductible expenses through the solution’s quick payment and flexibility in how funds can be used. The structure provided a dynamic payout that increased with the intensity of shaking and geographic spread of extreme energy.
Due to the earthquake’s intensity, the customer qualified for a partial payout. They received the funds less than four weeks after the event, helping them cover the immediate expenses associated with the losses. This was the first payout for our location-specific parametric QUAKE in North America.
"Among the appealing parametric benefits were the promise of prompt payments based upon the location and severity of an earthquake and the opportunity to use those payments for any purpose… Less than 30 days after the earthquake, Swiss Re Corporate Solutions issued payment to the State of Utah."
Brian Nelson, Director, State of Utah Division of Risk Management
"Parametric QUAKE was an attractive product for our client, because we were able to structure an affordable solution that gave them more coverage and flexibility. When the product was tested, it performed exactly as expected."
Wil Cooper, Wholesale Broker, AmWINS
"Parametric insurance has allowed us to look at the peril of Utah earthquakes through a new lens and with a myriad of options to structure coverage. Swiss Re Corporate Solutions showed us the benefit of earthquake coverage tied to insured values by zip code…"
Jonathan Stutz, Broker, Moreton & Company
Learn more about our parametric QUAKE solution.