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WASHINGTON – Lloyd’s of London, the world’s specialist insurance company providing services to companies in more than 200 countries, has issued a dire warning of the potential consequences of an electromagnetic pulse event from a solar storm, according to report from Joseph Farah’s G2 Bulletin.
Lloyd’s study, titled “Solar Storm Risk to the North American Electric Grid,” centered on the highly populated region from New York City to Washington, D.C., but added that other high-risk regions are in the Midwest and in regions along the Gulf Coast.
The fact a major insurance company is looking at the economic consequences of an EMP from a direct solar storm suggests there is increasing concern in the insurance industry that companies may be facing the danger of severe economic losses.
As a major trend setter in the insurance world, Lloyd’s unusual warning about the effects from an EMP could have an impact on insurance company coverage.
“A severe space weather event that causes major disruption to the electric network in the U.S. could have major implications for the insurance industry,” the Lloyd’s study said. “If businesses, public services and households are without power for sustained periods of time, insurers may be exposed to business interruption and other claims.”
Sources suggest insurance companies could begin requiring companies they insure make sufficient efforts to harden their electronics to protect their companies, especially since companies now can collect insurance for work stoppage due to electrical outages.
“A severe space weather event that causes major disruption to the electricity network in North America could have major implications for the insurance industry,” the study said. “The total U.S. population at risk of an extended outage from a Carrington-level storm ranges between 20-40 million with durations up to 1-2 years.”
Some experts suggest an EMP with this catastrophic effect on major U.S. urban centers could, in effect, wipe out city populations because of their dependency on those critical infrastructures that rely on electricity, electronics and automated control systems to exist.
Sources say that it is curious that a British insurance company would center on the effects of an EMP on U.S. cities rather than in Britain, which has decided to undertake efforts to harden its national electrical grid system. They add, if the United States doesn’t take action, the effects will have profound effects on the world economy.
Saying that the corridor between Washington, D.C., and New York City is at serious risk, the impact on a society that is increasingly dependent on electricity is “likely to be severe and wide-ranging,” the report said.
The 1859 Carrington event is regarded as the most severe solar storm recorded in U.S. history. It occurred 154 years ago. The Lloyd’s study warned, however, that such “very extreme storms” occur every 150 years.
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