Liberty Mutual Reinsurance (LM Re), a division of Liberty Mutual Insurance Group, recently executed a parametric payment to Mexico's federal government. This significant disbursement was in response to a 7.3 magnitude earthquake that impacted Mexico's southern coastal region in July. The payout was successfully initiated thanks to the activation of Safehub's sophisticated Shake Network.
Reinsurance Innovation Strengthens Mexico's Disaster Resilience
On October 13th, 2026, Liberty Mutual Reinsurance (LM Re) announced a crucial parametric payout to the Mexican federal government. This payment was prompted by a powerful 7.3 magnitude earthquake that struck Mexico's southern coast on July 17th, 2026. The event activated Safehub's Shake Network, a testament to the advanced technology underpinning the insurance policy.
This coverage was part of the Mexican government's comprehensive nationwide parametric earthquake and volcanic risk insurance initiative, a program for which LM Re has been the primary capacity provider since June. The Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) oversees this federal program, with Agroasemex, S.A., a state-owned insurance institution, managing its administration.
A core component of this policy is ShakeNet Parametric, LM Re's proprietary earthquake parametric insurance and risk management system. This innovative solution is powered by Safehub's Shake Network and the Global Earthquake Model’s (GEM) OpenQuake engine. The deployment of Safehub's sensor network is pivotal, as it significantly reduces basis risk by providing real-time, ground-truth data that bridges the gap between theoretical models and actual ground motion experienced during seismic events.
Both LM Re and Safehub confirmed that their sensors accurately recorded shaking within 80 kilometers of the earthquake's epicenter, ensuring a precise and rapid trigger for the payout. This Mexican program stands as the largest implementation of ShakeNet Parametric to date, supported by an extensive nationwide Safehub sensor network.
The timely parametric payment aligns perfectly with the Mexican government's objective of bolstering fiscal resilience and ensuring the uninterrupted provision of public services in the aftermath of natural disasters. The transaction was facilitated by Augment Risk and the local broker TBS.
Jean-Christophe Garaix, Head of Parametrics and Agriculture at LM Re, expressed satisfaction, stating, “We are honored to support Mexico's government in its disaster preparedness efforts. This claim payout clearly demonstrates the efficacy of our solution in strengthening national disaster resilience, offering critical support precisely when policyholders need it most.” He further highlighted the increasing demand for high-resolution earthquake impact data in risk transfer applications, with additional large-scale projects currently under development globally.
Andy Thompson, CEO of Safehub, emphasized the importance of data, remarking, “Accurate ground-truth data is fundamental to harmonizing theoretical models with real-world impact, thereby diminishing basis risk. We take pride in the fact that Safehub’s sensor network and technology facilitated a swift and objective payout for the Mexican Government. Earthquake resilience relies on actionable, high-resolution data, and delivering such precision is at the heart of our mission.”
In 2025, LM Re and Safehub collaboratively introduced this novel earthquake parametric insurance solution, which they noted at the time would substantially reduce basis risk for parametric reinsurance policies.
This initiative highlights the transformative power of technological integration in the insurance sector. By leveraging advanced sensor networks and precise data analytics, parametric insurance models can offer governments and organizations a more reliable and immediate financial safety net against natural catastrophes. The success of this collaboration between Liberty Mutual Re and Safehub in Mexico sets a precedent for future innovations in disaster risk financing globally, demonstrating how a proactive, data-driven approach can significantly enhance national resilience and recovery efforts.
