Insurers may be significantly underestimating earthquake risk – by up to 60% in extreme cases – as models fail to capture the effects of “supershear” earthquakes, a little-known class, according to recent MS Amlin research.
According to the study, destructive supershear ruptures are behind two thirds of insured earthquakes losses from seismic events in the last decade, having caused losses equivalent to $13.2 billion.
Published in the Journal of Catastrophe Risk and Resilience, the paper warns this blindspot poses a serious threat for capital and pricing decisions, especially in major earthquake zones such as California.
Consequently, there are pressing demands for catastrophe model providers and risk carriers to address these vulnerabilities urgently.
Supershear earthquakes produce a shockwave comparable to a sonic boom from a jet when fault ruptures progress at exceptional speeds. These events generate intense ground movement and a “double punch” impact resulting from consecutive seismic waves..
According to the paper, supershear earthquakes can produce “unusual torsional forces” on buildings, particularly taller structures, while also creating stronger shaking that travels further away from the fault
Supershear earthquakes used to be considered rare, but now, as seismic technology improves, they are being identified more frequently. Around 36% of major strike slip earthquakes globally since 2010 have involved supershear rupture.
Luke Wedmore, Senior Research Analyst at MS Amlin, who co-authored the study alongside William Sturgeon, Research Analyst, 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.”
Myanmar’s earthquake in 2025 of a 7.7 magnitude is a prime example of the daggers of a supershear event – which produced a surface rupture stretching 475km, around 230km longer than estimates would have predicted.
This materially increases the area exposed to shaking, the paper said. These findings are especially critical for California, the world’s largest earthquake insurance market, where the San Andreas Fault is vulnerable to supershear.
The 1906 San Francisco earthquake has since been identified as a supershear event, according to the report.
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 impacts of supershear effects on representative insurance and reinsurance portfolios, finding that losses at a 200-year return period increased by 5% to 10%. At 500-year return periods, losses jumped between 30% and 60%.
Wedmore urged insurers to quickly integrate supershear risks before the next generation of catastrophe models is finalised.
In the short term, the paper suggests that insurers and vendors use stress tests and sensitivity scenarios to access the risk. Other recommended actions include identifying long strike-slip faults capable of supershear rupture and testing alternative shaking patterns within catastrophe models.
