The Mexican federal government has launched a nationwide parametric insurance program covering earthquake and volcanic risk. Liberty Mutual Reinsurance (LM Re) is acting as lead capacity provider, with seismic sensor firm Safehub supplying the triggering technology.
Augment Risk and domestic broker TBS placed the coverage. The program is part of Mexico’s sovereign disaster risk financing strategy, designed to protect public finances and maintain essential services after major natural catastrophes.
The solution is built on ShakeNet Parametric, LM Re’s earthquake parametric product. It is triggered by Safehub’s Shake Network and powered by the Global Earthquake Model’s OpenQuake engine. Safehub’s proprietary sensor network collects highly localized shaking data, allowing payouts to be calculated rapidly and objectively after a qualifying event.
This is the largest ShakeNet Parametric deployment to date, though it is not the first time the technology has been used in Mexico. LM Re previously delivered the world’s first sensor-based parametric reinsurance treaty for earthquake risk, with the initial rollout in Mexico. Safehub’s sensors there provided real-time, building-specific shaking data for claims payouts.
The firms said additional large-scale projects using the same technology are in development across other markets.
The Mexico deployment is the product of a working relationship between LM Re and Safehub that began in 2023 with a sensor-triggered parametric reinsurance treaty. In 2024, the two firms expanded to a wider parametric product for global clients. In 2025, the solution was updated to reduce basis risk, the gap between what a policy trigger measures and what an insured actually loses.
The new program complements, but is separate from, Mexico’s World Bank-issued parametric catastrophe bonds, which already cover earthquake and hurricane risk.
Mexico doubled its parametric catastrophe insurance arrangement to approximately US$575 million for 2026 into 2027. Whether this program is part of that renewal or a separate addition has not been confirmed.
Sensor-triggered and parametric programs have faced questions about whether triggers accurately capture actual ground conditions. A recent case sharpened that debate.
In November 2025, Jamaica’s US$150 million World Bank-issued catastrophe bond paid out in full after Hurricane Melissa met the bond’s pre-agreed parametric thresholds. The event provided evidence that well-structured parametric programs can deliver liquidity as designed under extreme conditions. Investor appetite in the ILS market held firm after the payout.
Andy Thompson, CEO of Safehub, said the Mexico program showed how sensor networks could serve governments in a crisis.
“This solution demonstrates how increased seismic monitoring can strengthen disaster resilience at a national scale,” he said. “By combining dense sensor networks with parametric insurance, we’re helping governments access faster liquidity while improving situational awareness when it matters most.”
The program arrives as global appetite for parametric solutions continues to grow. The global parametric insurance sector was valued at US$11.7 billion in 2021 and is projected to reach US$29.3 billion by 2031, according to market data cited by Gallagher Re. That trajectory points to demand for mechanisms that deliver post-disaster liquidity faster than traditional indemnity claims.
