Aon Benfield’s report, “Geomagnetic Storms,” highlights the significant risks that severe space weather events pose to modern infrastructure, including electrical power distribution, telecommunications, and satellite navigation systems. The report emphasizes that while the probability of such events is low, their potential impact is substantial, with economic costs of a major geomagnetic storm in the U.S. alone estimated at up to $2 trillion for the first year, with recovery spanning up to a decade. The insurance industry is urged to develop comprehensive risk management strategies and consider the implications for policy coverage and pricing to mitigate the effects of these low-probability, high-consequence events.
