Skip to main content

Emerging Risk Underwriting

How Short-Term Seismic Risk Data from Accurate Models Impacts Coverage

Emerging risk underwriting is a specialized insurance practice that addresses the challenges posed by new and evolving risks. One of the most significant emerging risks is the threat of earthquakes. Short-term seismic risk data from accurate models can help underwriters to better assess the risk of earthquakes and develop more tailored insurance solutions for businesses.

Short-term seismic risk data provides information on the likelihood and severity of earthquakes in a specific location over a short period of time, such as the next few days or weeks. This data can be used by underwriters to identify businesses that are at high risk of earthquakes and to develop pricing and coverage options that reflect this risk.

Accurate seismic risk models are essential for developing reliable short-term seismic risk data. These models take into account a variety of factors, such as the location and type of faults, the history of earthquakes in the area, and the vulnerability of local infrastructure.

By using short-term seismic risk data from accurate models, underwriters can develop more affordable and comprehensive earthquake insurance coverage for businesses. This can help businesses to mitigate the financial impact of earthquakes and to continue operating even after a major event.


A business that is located in a high-risk earthquake zone may be able to obtain earthquake insurance coverage with a lower premium if it uses short-term seismic risk data to demonstrate that it is taking steps to mitigate its risk. For example, the business may have installed earthquake-resistant construction features or have developed a plan for evacuating employees in the event of an earthquake.

Short-term seismic risk data can also be used to develop parametric earthquake insurance products. These products pay out a predetermined amount of money if an earthquake of a certain magnitude occurs within a certain distance of the insured property. Parametric earthquake insurance products can be more affordable than traditional earthquake insurance products, and they can be tailored to the specific needs of each business.

The use of short-term seismic risk data in emerging risk underwriting is a positive development for businesses. By providing underwriters with more accurate and timely information about earthquake risk, this data can help to make earthquake insurance more affordable and accessible. This can help businesses to mitigate the financial impact of earthquakes and to continue operating even after a major event.