MS Amlin warns earthquake models miss supershear loss risk

Insurers may be significantly underestimating earthquake risk because catastrophe models do not adequately capture supershear ruptures, according to new research from MS Amlin.

The Lloyd’s insurer emphasised that supershear earthquakes have been linked to 66% of insured losses from seismic events since 2016, equivalent to $13.2bn.

MS Amlin warned that these ruptures remain absent from seismic hazard models, building design codes and insurance catastrophe models, despite their potential to generate materially higher losses.

The findings are set out in “Supershear Earthquakes, An insurance blind spot”, a paper by MS Amlin researchers Luke Wedmore and William Sturgeon, published in the “Journal of Catastrophe Risk and Resilience”.

Supershear earthquakes occur when rupture along a fault travels faster than usual, creating a shockwave similar to the sonic boom generated by a jet aircraft.

MS Amlin said this can produce far stronger ground shaking and a “double punch” effect caused by successive seismic waves.

The paper also warned that supershear events can generate “unusual torsional forces” on buildings, particularly taller structures, while sending stronger shaking further away from the fault.

Luke Wedmore, senior research analyst at MS Amlin, said: “There are still lots of things we don’t know about supershear earthquakes, but the evidence now suggests they are more common, and potentially far more damaging, than previously understood.

“The sonic boom produced by these ruptures can cause more intense and widespread damage, yet the impact is significantly underestimated in models used for capital and pricing decisions for earthquake risks.”

MS Amlin said supershear earthquakes were once considered rare, but are being identified more frequently as seismic technology improves.

Around 36% of major strike-slip earthquakes globally since 2010 have involved supershear rupture, according to the insurer.

Researchers pointed to the magnitude 7.7 Myanmar earthquake in 2025, which was identified as a supershear event.

MS Amlin said the earthquake produced a surface rupture stretching 475km, around 230km longer than estimates would have predicted, materially increasing the area exposed to shaking.

The findings are particularly relevant for California, the world’s largest earthquake insurance market.

MS Amlin said the San Andreas Fault is vulnerable to supershear, while the 1906 San Francisco earthquake has since been identified as a supershear event.

Wedmore said: “Given the higher shaking intensities caused by supershear earthquakes, there is a significant chance that earthquake risk in California is markedly underestimated.

“With California potentially experiencing its longest major earthquake drought in 1,000 years, now is a critical moment for the industry to address this blindspot.”

MS Amlin modelled the impact of supershear effects on representative insurance and reinsurance portfolios.

The insurer found that losses at a 200-year return period increased by 5% to 10%.

At 500-year return periods, losses rose between 30% and 60%.

Wedmore said MS Amlin had already updated its catastrophe models and view of risk to incorporate supershear effects.

“We have already updated our catastrophe models and view-of-risk to incorporate supershear effects and better understand the potential impacts on our portfolios.

“As the scientific evidence continues to strengthen, the wider industry must urgently do the same to incorporate supershear ruptures and their consequences.

“With major model vendors preparing to update US earthquake models following revisions to the national seismic hazard framework, a narrow window is open for the industry to close this gap.”

MS Amlin said insurers and catastrophe model vendors could begin addressing the issue through stress tests and enhanced sensitivity scenarios.

Suggested steps include identifying long strike-slip faults capable of supershear rupture and testing alternative shaking patterns within catastrophe models.

The paper added: “The next steps need to involve collaboration between scientists, engineers, risk practitioners and the (re)insurance industry to advance the science and simultaneously produce practical solutions, regulations and guidance.”