A magnitude 5.8 earthquake struck Ica, Peru, on May 19, 2026. The commercial client holding a ShakeNet Parametric policy received a claims payment 21 days after the event and used the funds for immediate recovery costs. Liberty Mutual Reinsurance (LM Re) and Safehub confirmed the Peru event as the first earthquake parametric payment triggered by Safehub's Shake Network. The policy was placed by Price Forbes Latam and purchased by the client in October 2025 as a complement to its traditional indemnity placement.
That distinction matters. The parametric layer was structured to provide immediate liquidity after a qualifying seismic event, not to replace indemnity coverage. The 21-day settlement ran alongside, not instead of, the indemnity process. For brokers advising commercial clients in seismically active Latin American markets, the Peru event provides a verified settlement timeline and a working placement model to bring to that conversation.
Parametric policies pay when a pre-agreed index threshold is crossed. The threshold in a conventional earthquake parametric is typically a magnitude reading within a defined radius of the insured location. ShakeNet Parametric uses a different approach: Safehub's proprietary sensor network generates localised shaking maps after a seismic event, powered by the Global Earthquake Model Foundation's OpenQuake engine - an open-source seismic hazard modelling framework. The trigger is ground acceleration levels measured at specific client locations, not magnitude at a distant epicentre.
Basis risk has historically been the primary constraint on parametric earthquake adoption. A magnitude-based trigger can fire when an earthquake occurs far enough from the insured site to cause little actual damage, generating a payout unrelated to real loss. It can equally fail to fire when a smaller local event causes significant ground shaking at the location that matters. Sensor-level data reduces that gap by measuring what occurred at the relevant sites. Andy Thompson, CEO of Safehub, said the Peru event confirms the mechanism works under real seismic conditions. "A parametric insurance policy is only as good as the data driving the trigger. This first-of-its-kind payout validates the real-world impact of Safehub's Shake Network," Thompson said.
Jean-Christophe Garaix, head of parametrics and agriculture at LM Re, said the Peru result demonstrates the regional potential. "There is a huge potential for parametric insurance right now, particularly after recent seismic events in the LatAm region. The speedy payout in Peru demonstrates how the solution can strengthen disaster resilience," Garaix said.
Latin America carries significant seismic risk with low insurance penetration relative to that exposure. Peru sits on the Pacific Ring of Fire, where the Nazca Plate subducts beneath the South American Plate. Traditional indemnity earthquake settlements can run to months or longer after a major event, during which businesses face recovery costs without access to claim proceeds. The parametric supplement addresses that cash-flow gap specifically rather than replacing the indemnity programme.
The broader parametric market is expanding rapidly. The global market is estimated to reach US$34.4 billion by 2033, according to research cited by AM Best, with earthquake and tropical cyclone coverage among the most established segments.
LM Re and Safehub first worked together on a sensor-based parametric reinsurance treaty in 2023, alongside MGA XS Global. They formalised a bilateral partnership in April 2024 before launching ShakeNet Parametric as a commercial product in August 2025. The Peru event is the first recorded live trigger in the approximately nine months since commercial launch. For brokers with commercial clients in Peru, Chile, Colombia, Mexico, or other seismically active Latin American markets, the Peru placement structure - supplementary parametric layer over a traditional programme, providing liquidity within 21 days of a qualifying trigger - is now a verified reference point rather than a theoretical product design.
