Seismic activity linked to fracking operations’ wastewater disposal has reached unprecedented levels in the US state of Oklahoma and the probability of widespread damage is now too high to ignore, Swiss Re warns in a new report.

The reinsurer says there could be large uninsured losses if a big earthquake hits the state, due to low overall take-up for cover, high deductibles and common policy exclusions.

In Oklahoma the number of magnitude-three quakes has grown from an annual rate of about 2% to an average of nearly three per day since 2008, making it the most seismically active of the mainland states.

At the same time, oil and natural gas operations have increased the use of hydraulic fracturing, or fracking, with the rise in quakes mostly associated with wastewater injection.

Swiss Re’s research paper focuses on Oklahoma, where the issue is most acute, but it says induced earthquakes are also on the rise in Kansas, Texas, western Canada and elsewhere.

“Property and business owners in Oklahoma and other affected regions should insure themselves against future earthquake damage,” it says.

“The probability of a large event causing widespread damage is now too high to neglect.”

Modelling that includes the increased seismic activity shows a loss-causing quake in Oklahoma could now be expected about once in seven years, compared with once in 100 years previously.

“Prices and risk models developed more than a few years ago are no longer relevant given the levels of hazard we observe today,” it says.

Oklahoma has asked the petroleum industry to act voluntarily, with most companies following suggested reductions in wastewater injection after a detected earthquake.

“Changing regulations, and how the oil and gas industry respond, remain the biggest contributor to uncertainty of how the risk will change in the future,” Swiss Re says.