If a solar storm similar to the “Carrington Event” were to occur today, US insurance industry losses could range anywhere between $71 billion to $433 billion, according to global insurance broker WTW.
The Carrington Event, the most powerful solar storm in recorded history, took place on September 1 and 2, 1859. It caused telegraph systems across Europe and North America to fail. Some operators were able to transmit messages even after disconnecting power, as the geomagnetic storm induced electrical currents in the telegraph wires.
Although the world hasn’t experienced a solar storm of that magnitude since, WTW warns that we shouldn’t assume the odds of such an event are zero.
With our increased reliance on technology and electronic systems, a modern-day Carrington Event could cause severe economic and societal disruptions.
Estimating the potential impacts on vehicles, property, and power grids is challenging due to limited historical precedents and modelling studies. However, WTW provides a broad estimate of US insured losses ranging from $71 billion to $433 billion.
To put these figures in perspective, the potential maximum insured losses from a modern-day Carrington Event would be equivalent to the combined losses of Hurricanes Katrina, Ian, Irma, Sandy, Harvey, Ida, Maria, Andrew, and Ike.
Additionally, the global GDP at risk from a Carrington-style event is estimated to range from $183 billion to over $1 trillion.
These wide-ranging potential outcomes highlight the significant financial implications that solar flares could impose.
WTW concluded, “Unlike other natural disasters, which are often regionally confined, the impact of a Carrington-style event would be global — directly affecting supply chains and disconnecting large populations from power for weeks or months.”
