Re-/Isurace impact due to power blackout Physical ad o-physical BI / CBI evets
Overview UW impact due to blackout Space Weather Awareess Dialogue 25./26.10.2011 Bruxelles 2
Blackout sceario clusters Space Weather Awareess Dialogue 25./26.10.2011 Bruxelles 3
Potetial re-/isurace impact Power blackout scearios Route cause Utility Power blackout Isured Physical @ utility NoPhysical @ utility Blackout evet Blackout evet Nophysical Physical A Property? Busiess iterruptio? Cotiget BI? Space Weather Awareess Dialogue 25./26.10.2011 Bruxelles Nophysical Physical B Busiess iterruptio? Cotiget BI? C Property? Busiess iterruptio? Cotiget BI? 4 D Busiess iterruptio? Cotiget BI?
Pre-coditios for power blackout Eergy market eviromet Ageig ifrastructure (e.g. protectio system failure millisecods differece betwee cotrol systems) Eergy market liberalisatio speculatio (e.g. physical supply warrat is ot eough i case of capacity overload) liquidity of power market 'political games' (e.g. artificial shortage of eergy supply) # of power suppliers (who could / does support others i case of serious power shortage) Eergy tradig might lead to additioal volatility i power grid. "Smart grid" risks (e.g. 'volatile' reewable power sources such as wid power) Privatisatio -> e.g. Califoria private utilities Productio efficiecy (o slack i systems) Cotrol via TCP / IP Iteret ad telecom etworks Iterdepedecies (+ are redudacies / - small effect ca have large coseq.) Star-like ets versus itegrated eergy ets Real estate market: ew buildigs (e.g. Miergie-Stadard eeds eergy) might have differet eergy requiremets Space Weather Awareess Dialogue 25./26.10.2011 Bruxelles 5
Blackouts o-liear effects Isurace loss Isurace limits Normally o or very limited isurace losses due to time deductibles? No-liear effects * 24h 48h *evet loss experiece oly for evets <24h 72h Space Weather Awareess Dialogue 25./26.10.2011 Bruxelles PD ad/or BI ivolved for e.g. the followig idustries Alumiium (e.g. smelter) Steel (e.g. furace coolig) Miig (e.g. pumps, air) Food & beverages (e.g. coolig, aimal farmig) Fiacial services (e.g. moetary trasactios) High-tech idustry wafer fab (e.g. filters) Petrochemical / Chemical idustry (e.g. storm surge Gulf of Mexico) Nuclear power plats [Cemet idustry] [Utilities] [Trasportatio] [Hospitals] [Commuicatios Telecom] Time 168h 6
Solar storms Cosequeces ad mitigatio measures Risk idetificatio: Electricity etworks are vulerable (e.g. geomagetically iduced currets through solar storms) Sceario: Geomagetic storm i NA / Europe Worst case sceario: Strog geomagetic storm over North America Risk assessmet: Qualitative ad quatitative risk sceario assessmet Potetial isurace losses Property (PD) at utility ad off premises isured Busiess iterruptio (BI) Cotiget busiess iterruptio (CBI) Risk mitigatio: Risk commuicatio: CRO Forum ERI Costructioal measures Adaptatio of uderwritig approach Space Weather Awareess Dialogue 25./26.10.2011 Bruxelles Regios with potetial blackouts Affected regios > 130 millio people; stregth as May 1921 evet (10x stregth of1989 evet, but less strog tha 1859 storm) 300 trasformer statios affected; trasformer supply time is about 12 moths Ecoomic cost: > USD 1 trillio Source: Natioal Academy of Scieces, US 7
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