Following the Northridge earthquake in California in 1994, the residential insurance industry was rocked by the magnitude and potentially huge costs associated with the peril of Earthquake.
Post Northridge, over 93% of the California Homeowners market had stopped or restricted earthquake writings in California, due to the vast exposures involved.
BMS was appointed London broker for the newly created California Earthquake Authority (CEA) Quota Share Placement at its formation in 1996.
CEA, a not-for-profit publicly managed, privately funded entity was created so that participating members could issue their own homeowners policies excluding earthquake, and then add on a CEA earthquake endorsement for their customers
The London placement was a huge success, with the majority of Reinsurance Syndicates participating - nearly 100 syndicates - and with a large range of written lines.
Back then, a folded cardboard slip was used where subscribing Syndicates and markets would put down their stamps. The slip was over two metres long and had signatures on both sides. It quickly became one of the most recognised placements in the market.
The product continues to be offered today, and is recognised as a success in managing the problem of Earthquake exposure in California.
