We get this question a lot.

The simple answer is that Bounce’s claims payment process would have been activated by all the major earthquakes (i.e. earthquakes with a magnitude greater than 5) that we have seen in New Zealand over the past decade. Assuming that GeoNet sensors showed a ground movement of at least 20cm per second, then this means that Bounce could have hypothetically supported thousands of Kiwis bounce back to recovery.

The Science

Let’s first look at the science behind Bounce’s claim system.

To ensure fast, fair payments, we use independent and trusted seismic data from approximately 700 GeoNet Seismic sensors located around the country. This data allows us to determine which customers are eligible to make a claim.

Secondly, payment eligibility is based on shaking intensity, with a metric known as Peak Ground Velocity (PGV). If an earthquake results in shaking of at least 20 centimetres per second at the nearest GeoNet sensor to your insured location, you are eligible to receive a payment from your Bounce policy.

Peak Ground Velocity (PGV) is a suitable measure of shaking intensity across affected areas because it accounts for the earthquake’s depth and the soil structure. This means it can accurately reflect scenarios like the Canterbury earthquakes, where softer soils led to increased shaking intensity, liquefaction, and damage. Refer to GeoNet for more information GeoNet: Earthquake Intensity.

Bounces' response

Unfortunately, there are a large number severe earthquakes that have occurred in New Zealand recently that we can use to see how Bounce would have responded. The key quakes are:

·       first large Christchurch Earthquake (4 September 2010) the highest PGV measured was 125cm/sec (M7.2 and MMI X).

·       second large Christchurch Earthquake (22 Feb 2011) the highest PGV measured was 106cm/sec (M6.2 and MMI VIII).

·       third large Christchurch Earthquake (13 Jun 2011) the highest PGV measured was 98cm/sec (M6.0 and MMI VIII).

·       fourth large Christchurch Earthquake (23 Dec 2011) the highest PGV measured was 49cm/sec (M5.8 and MMI VIII).

·       largest earthquake in recent memory was the Kaikoura earthquake (13 November 2016), and highest PGV was measured at 116cm/sec (M7.8 and MMI IX).

Remember that a Bounce policy is triggered by an earthquake with a PGV of at least 20cm/sec, assuming confirmation of loss, hypothetically Bounce would have responded and supported many customers recover from these shakes. If we assume Bounce provided cover for just 1% of the market (2,978 policies out of 297,787 dwellings in the Canterbury region) then we would have supported policyholders with the following payouts (assuming each household held a policy with $10K benefit):

Many of these dwellings would have had traditional earthquake insurance. However, we all know how complex and time consuming it can be to make, process, and receive traditional insurance claims.

Had Bounce been up and running, it’s claims payment system would have insurance payments in bank accounts within days of being notified of a major earthquake by GeoNet sensors. Swift response in an earthquake crisis, helps Kiwi’s bounce back quickly.