Archive for Earthquake Insurance

Lloyds prepares for Solar Meltdown!

“Ground Control to Major Tom!”

“Check your policy wording and put your spacesuit on!”

Insurance Business have finally moved into the 21st Century with some truly space age of aquarius exposures to risk to deal with over the next year, according to a new report from Lloyds of London.

These new age risks include Space weather, cyber risk and critical infrastructure attacks that are predicted to cause big problems for consumers, businesses and their insurance companies in 2011.

The Lloyd’s 360 Risk Insight report states that ‘The phenomenon of space weather is one of the most difficult to quantify and yet potentially serious sources of loss and disruption for business.’

“Space weather and its impact on Earth: Implications for business”, says that businesses should be looking at ways to assess and mitigate space weather risks this year because the 11-year solar cycle is expected to peak in 2012/13.”

Turbulent space weather created by solar phenomena such as coronal mass ejections, solar flares, solar wind, solar radiation and magnetic storms could have wide ranging impacts around the globe in climatic responses, many scientists believe.

These phenomena are also predicted to affect aircraft communications, air traffic control and navigational systems which could malfunction or might stop working, satellite and GPS systems could also malfunction, and surprisingly. power grids could collapse.

Scientists know a lot about the possible causes and effects of solar weather from previous cycles. Established infrastructure that we take for granted, such as rail networks, telephone systems, pipelines and electric power grids have all been seriously disrupted by space weather in the past.

But the economic fall-out that could result from the increasingly active solar season is far less certain. That’s because our dependency on wi-fi and internet technology is so much greater than before.

“There is growing concern that the coming solar maximum will expose problems in the many wireless systems that have grown in popularity during the quiet solar conditions that have prevailed over recent years,” the Lloyd’s report warns.

Insurance Blog should have a lot to write about then over the coming year if these concerns are realised.

And then it’s 2012!

Don’t worry about the risks to the Olympic games! The Mayan Calendar stops here……….

And the earth is positioned in alignment with the centre of of the Universe!

Apocalypse Now for Natural Disaster Insurance Claims

February 2010 has seen unprecendented natural disasters and as we head full steam towards December 2012, if those Mayan descendents and crusading followers of John’s Revelation are to believed, we have only just seen the beginning of the great losses as we plummet into the ‘End of Days!
Yeah OK! Insurance Blogger prefers predictions backed up with slightly more statistical analysis and insight……

however , a report released this week from Aon Benfield’s Impact forecasting team has predicted that the cost of recent natural disasters is likely to cost both the reinsurance and insurance sector billions.

The capital advisory unit provided the damning verdict in the latest edition of its Monthly Cat Recap report its regular analysis of worldwide catastrophic events. A combination of the Chilean earthquake, Windstorm Xynthia and savage winter conditions across the US and Europe in February has left many in the industry feeling the financial impact.

The magnitude 8.8 earthquake in Chile, the seventh strongest earthquake ever record, has devastated the South American country and has taken the life of at least 795 people. The tragic disaster follows only weeks on from the horrific Haiti earthquake disaster which has sadly now claimed over 200,000 lives.

However, it is the impact of the Chilean earthquake which may effect the tentative recovery of the global economy as the country has far more exposure to risk than the poverty stricken Caribbean island. With more than 1.5 million homes, buildings and other structures affected insured losses alone are set to be in single figure billions of dollars whilst the economic losses are expected to reach tens of billions of dollars. (USD)

There was further suffering in South America with flooding across four regions of Bolivia killing 15 people and more than 100,000 people having to abandon their homes. It is believed that well over than 35,000 homes have been damaged. Also in the continent 20,000 homes have been damaged or destroyed in Peru due severe flooding which also affected Uruguay and Argentina.

In Europe Windstorm Xynthia ravaged Spain, Portugal, France, Belgium and Germany causing damage right across western Europe and leaving close to two million homes without electricity. The report predicts that the insured losses resulting from the storm are expected to be in excess of 1.8 billion dollars (USD)

Meanwhile the heavy rains that soaked the continent were responsible for extensive flood damage in Bulgaria, Turkey and Italy. Greece’s current troubles were also deepened with 20,000 hectares of land flooded and damage to homes and infrastructure likely to cost approximately 10 million dollars (USD). Other areas hit by torrential rain and flooding were Madeira and Spain with reports of further lives being lost in Madeira and extensive property infrastructure damage resulting in reconstruction costs which are likely to approach 1.35 billion dollars.

The US too has also suffered severe winter storms as commentators suggest that the effects of climate change are beginning to take hold. Several key regions including Washington, New Jersey, Baltimore and Philadelphia which resulted in widespread blackouts and disruption to schools, airports, roads and railways. Over 35,000 claims have been filed in the US across February totalling 125 million dollars (USD)

With plenty of insurers posting strong financial profits after the benign hurricane season last year it seems Mother Nature is intent and making herself felt once again – or are we feeling as some would have us believe the first real effects of the climate change?

Either way February 2010 will be a month that will marked in history as a tumultuous and tragic year which has resulted in heavy costs both financial term and also tragically the loss of innocent life.

UK Earthquake Insurance – Make Sure Your Buildings Insurance Covers It!

With all our thoughts over the last month focused on the devastation caused by the earthquake in Haiti, Insurance blogger has investigated the risks to UK homes and property from earthquakes.

You might think that because we do not live in a littoral area of plate tectonic activity, that seismic activity would be minimal, and the risks would be negligible….

However recent trends in the UK have shown the importance of making sure you have this peril covered as part of your basic buildings insurance policy.

On 28th April 2007 an Earthquake measuring 4.3 on the Ricter scale hit the small coastal town of Folkestone in Kent.

The earthquake’s shallow depth and proximity to Folkestone resulted in structural damage in the town, and one woman suffered minor injuries.
Following the earthquake, a total 474 properties were reported as damaged with 73 properties too badly damaged for people to return to, 94 seriously damaged, and 307 suffering from minor structural damage. The Association of British Insurers estimated claims to be in the region of GBP30 million. Only 40 percent of the properties damaged were insured!

It was the largest earthquake experienced in the UK since the 2002 earthquake in Dudley in the West Midlands, and the strongest in the active English Channel / Dover Straits region, since a magnitude 4.4 earthquake in 1950.

The strongest recorded British earthquake was the 1931 Dogger Bank earthquake which measured 6.1 on the Richter scale. Shock waves were recorded across the continent of Europe and Tsunamis hit the East coast of Britain and extended as far as Calais in France causing localised flooding and property damage.

The most destructive earthquake on record in the UK occurred in 1884 in Colchester in Essex. In total the earthquake damaged around 1200 buildings and killed five people.
In 2009 Folkestone was shaken by a smaller magnitude 3.0 quake, located in the same area as the 2007 quake.

Depending upon the intensity of the quake and the following effects are typically experienced in UK earthquakes.
European Earthquake Intensity Scale
3 – Felt by few
4 – Felt by many indoors, windows and doors rattle
5 – Felt by most indoors, small objects fall over
6 – People run out in alarm, slight damage to buildings (plaster cracks)
7 – Moderate damage to buildings (chimneys fall, cracks in walls)

In the UK the areas where risk is higher than average include the West Highlands of Scotland, an arcuate zone running from west of the Pennines from Carlisle to Pembroke, NW Wales and W Cornwall. to the East, keny and East Anglia experience the most shocks.

 Distribution of Earthquakes and their magnitude in the UK

The places in the UK with lowest seismic hazard are Northern Ireland (especially the western counties), NE England and outlying parts of Scotland, including the Orkneys and Outer Hebrides.
All UK Building Insurance policies cover Earthquakes as a basic peril and inlude total loss cover.