Monday, August 1, 2016

Insurance--Space Weather: Solar Storm Could Cause $330 Billion Insured Loss

From Artemis:
The University of Cambridge  has released a report exploring the potential impact space weather could have on the U.S. economy and insurance industry, noting that its stress test scenario shows the insurance industry could face losses of as much as $334 billion.

Much uncertainty surrounds the potential economic impacts an extreme space weather event could have on modern economies, leading the Cambridge Centre for Risk Studies to produce a stress test scenario (the Helios Solar Storm Scenario) that explores the impacts of a U.S.-wide power system collapse as a result of extreme space weather, such as solar storms and geomagnetic activity.

“This scenario describes how an extreme space weather event can cause direct damage and indirect debilitation of high voltage transmission grids in the USA, resulting in power blackouts along with consequential insurance claims and economic losses,” says the report, Helios Solar Storm Scenario.
The stress test includes three variations of the Helios Solar Storm Scenario, that differ in regards to damage distribution and restoration timeframes says the report, and which has the potential to result in an insurance industry loss of between $55 billion and a massive $333.7 billion.

To put the above figures into context, the report notes that the lower end of the loss estimate would still be roughly double the volume of insurance payouts from both superstorm Sandy and hurricane Katrina, and fairly close to the overall insured loss from global catastrophes in 2015.

A wide range of business lines could be affected by space weather events, says the report, highlighting a selection of potential loss areas. This includes, power transmission operators, power generation companies, companies that lose electricity, satellites, homeowners and specialty lines, such as event cancellation.

The report considers three scenario variants, S1, S2 and X1, with the former being considered the baseline scenario. “It involves limited damage to EHV transformers in the US, with only 5% of those units suffering any damage, and restoration periods of moderate length,” says the report....MORE
We've checked in with the Cambridge risk boffins a few times including two that focused on robots:
"Stephen Hawking Joins Anti-Robot Apocalypse Think Tank"
BBC: "Risk of robot uprising wiping out human race to be studied"

On the other hand the folks at Oxford are a bit more chipper:
New Doomsday Analysis Says Humans are Doing Better than Expected

In the meantime, over at SolarHam (on blogroll at right) we read:

July 31, 2016 @ 00:150 UTC
Geomagnetic Storm Watch
Good evening. A middle latitude coronal hole (03) will move into a geoeffective position during the next several days and a solar wind stream flowing from this zone could lead to geomagnetic storming at higher latitudes. A faint coronal mass ejection (CME) observed on July 28th may enhance activity further with an expected arrival by August 2nd. A minor (G1) to moderate (G2) geomagnetic storm watch will be in effect during the beginning of the upcoming week. Stay tuned to for the most up to date information.
Image courtesy of SDO/AIA.