Earthquake Risk Transfer for Caribbean

Earthquake Risk Transfer for Caribbean; Short-term earthquake loss
Fig.1 - Hashed circles represent current Earling undercover regions.

After having severe earthquakes in the region since 1600, no earthquake in this intensity is reported while the vulnerability of all islands to major earthquakes increased enormously because of continuous population growth and changes in building and land-use practices. Most of the earthquakes occurring in the Eastern Caribbean are either tectonic or volcanic in origin. Tectonic earthquakes are generated when plates move as accumulated energy is released. Volcanic earthquakes are generated by the movement of magma within the lithosphere. Earling continuously monitors ground shaking through analyzing millions of recorded earthquake pre-indicator data through artificial intelligence. This method of data analysis provided new opportunities for public usage and authorities to being acknowledged before the next major events happen.

Since July 2018, Earling issued alerts before 2 events rocked the region. All of the Commonwealth Caribbean countries, with the exceptions of Bahamas and Guyana, lie close to the known tectonic plate boundaries. One of the latest major earthquakes that rocked the region is the M7.3 Depth 154km, 45 km from Carúpano, Sucre, Venezuela, on August 21, 2018. Earling monitors ground shaking around Grenada and some of the other Caribbean islands like Barbados, Martinique, and Dominica and issued several preparedness alerts for the region in which two of them were related to the Grenada region. One of the latest alerts that issued for the vicinity area of Grenada followed by an M5.5 in the expected radius, near Martinique on Friday, September 28, 2018 - 12:38 in the day 8 after alert issued for the region.

How EPA Affects Recent Insured Losses

Dominican: EPA Effect on Probable Maximum Loss

Fig.2 Probable Maximum Loss (PML) - Mean return period in years. EPA can help to extend the earthquake insurance penetration rate. Dominican earthquake Average Annual Loss is $363.85 million (Dominican Republic Disaster & Risk Profile, 2014).

Martinique: EPA Effect on Probable Maximum Loss

Fig.3 Probable Maximum Loss (PML) - Mean return period in years. EPA can help to extend the earthquake insurance penetration rate. Martinique earthquake Average Annual Loss is $78.91 million (Martinique Disaster & Risk Profile, 2014).

Barbados: EPA Effect on Probable Maximum Loss

Fig.4 Probable Maximum Loss (PML) - Mean return period in years. EPA can help to extend the earthquake insurance penetration rate. Barbados earthquake Average Annual Loss is $22.82 million (Barbados Disaster & Risk Profile, 2014).

Guadeloupe: EPA Effect on Probable Maximum Loss

Fig.5 Probable Maximum Loss (PML) - Mean return period in years. EPA can help to extend the earthquake insurance penetration rate. Guadeloupe earthquake Average Annual Loss is $179.8 million (Guadeloupe Disaster & Risk Profile, 2014).

Puerto Rico: EPA Effect on Probable Maximum Loss

Fig.6 Probable Maximum Loss (PML) - Mean return period in years. EPA can help to extend the earthquake insurance penetration rate. Puerto Rico earthquake Average Annual Loss is $354 million (Puerto Rico Disaster & Risk Profile, 2014).

Dominica: EPA Effect on Probable Maximum Loss

Fig.7 Probable Maximum Loss (PML) - Mean return period in years. EPA can help to extend the earthquake insurance penetration rate. Dominica earthquake Average Annual Loss is $13 million (Dominica Disaster & Risk Profile, 2014).

Caribbean short-term expected earthquake loss

Earthquake risks need to be transferred? download the report.

Affordable Risk Transfer

Once a loss occurs, it is too late to revise an insurance policy. Consequently, the policyholder must be extremely diligent during policy purchase and renewal. Understanding specific insurance requirements, carefully calculating the property and business interruption values, outlining contingency plans, and anticipating the potential losses at each location are all key steps in maximizing future insurance recoveries. In sum, paying close attention to the potential impact of a loss at the insurance procurement stage will help to minimize issues and maximize recovery when a loss does occur.

Proposing the best time-window(s) for maximizing insurance coverage before a catastrophe is the Earling solution to transfer earthquake risks. Instead of 365 days insurance, maximize the current coverage only for a few days in each year.

Now that revising insurance policies once a loss occurs is too late, Earling helps to know the best time to transfer risk through new policies or extending the current coverage for a limited period of time for example only for 10 days and not for 365 days of year.
Maximizing insurance coverage after a catastrophic loss is difficult for any company but Earling Earthquake Preparedness Alerts assists to do it before a catastrophe occur.

Well Known Risk Takers

Tackle your risks with our solutions to the big players. We propose enterprise companies as well as SMEs and individualizes the best time to purchase a new earthquake policy or extending the current coverage to make it inexpensive.
risk takers
Currently, Japan, New Zealand, Greece, Turkey, Caribbean, Chile, Ecuador, Taiwan, Romania, Indonesia, California are the regions, which Munich Re accepts their risks. In addition, South Africa, Oklahoma and Utah are subject to further work. Also, between the regions that Earling issues Earthquake Preparedness Alerts, Japan, New Zealand, Caribbean, Chile, Ecuador, Taiwan, Indonesia and US (California, Utah) are undercover by Swiss Re to take the risks.

How we can help?

In general, Earling has a global seismic monitoring network and specialists that are subject matter experts. Regarding the challenges mentioned above, Earling is been able to deliver support.

  • In the pressure on profitability, performance management and key performance indicator settings.
  • In the entrance of parametric insurance markets and issuing alternative products, Earling can deliver independent advice by our global resources.
  • To keep control on the impact of catastrophic events, Earling can assist in optimizing, validating on Cat and reinsurance programs modelling.

Requirements

Schedule a meeting to see how Earthquake Preparedness Alerts can transfer your risks.
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