Solar activity predicted to peak in early 2015 may release powerful geomagnetic energy that can disrupt electric grids, causing widespread blackouts and disrupting markets, says Lloyd's of London.
“One of the reasons that we are interested in activity on the sun in 2015 is that it has the potential to cause more damage now due to our increasingly complex electric systems and rapidly rising dependence on electricity,” Neal Smith, emerging risks and research manager at Lloyd's, tells PC360.
The insurance implications would start with contingent business interruption (CBI) claims, says Lloyd's in its report. Although standard CBI policies usually require evidence of physical damage to equipment, it might apply if transfor
mers were to explode because of space weather.
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