Ridgecrest Leads to Earthquake Coverage
The biggest driver of earthquake insurance take up in California is a combination of a post event policy rush and lowering premiums, according to officials at the California Earthquake Authority (CEA).
CEA officials said that policy growth of approximately 49,000, or about a 4.6% between June and October of this year, was driven partially by the July 2019 Ridgecrest earthquake swarm.
CEA Chief Financial Officer and Chief Insurance Operations Officer Tom Hanzel said at a board meeting today:
Los Angeles County did feel a little bit of the shaking from Ridgecrest, but it wasn't until you get to Kern County where you see biggest bump [in take up] from an event. They also saw an overall rate reduction in that county, so those two coinciding forces resulted in 17% increase in take up.
The agency added it saw the second largest increase in its annual policy count in its history in 2019, for a total of 1,105,000 as of October 31.
During the meeting the board also voted to continue its reinsurance and risk transfer strategy that would maintain its a 1-in-400-year capacity.
In 2019, the CEA had:
- Conducted 23 risk transfer transactions.
- Produced a total risk-transfer limit purchased $5,134,467,440.
- Purchased multi-year contacts totaling $1,875,099,960 or 37% of total risk-transfer limit purchased in 2019.
- Renewed a transformer reinsurance contract for $400,000,000.
Finally, the CEA renewed the contract of AIR Worldwide for catastrophe modeling services, increasing the spend 6% to $335,000 per year.
Defense Bill Set to Repair Navy Quake Damage
The proposed National Defense Authorization Act filed yesterday includes $100 million for military construction projects, including money to repair facilities damaged by the Ridgecrest earthquake.
in light of the earthquakes in July, 6 2019, the Secretary of Defense should reprogram or marshal, to the fullest extent the law allows, all available resources that are necessary and appropriate
A report issued in August by the U.S Navy estimated that $2 billion in repairs are needed to the China Lake Naval Weapons Station that encompasses 1.1 million acres north and southeast of the desert town of Ridgecrest.
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