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Solar Coronal Mass Ejection (CME) or Electro-Magnetic Pulse (EMP) events are likely near-term scenarios that could decimate the insurance industry
The reinsurance industry fails to redistribute risk adequately, its very reason for being, according to a Harvard Business School professor in the interview cited below.
And in the case of a widespread catastrophic event such as a solar Coronal Mass Ejection (CME) or Electro-Magnetic Pulse (EMP) event, which could cause immediate property & casualty damage equal to "20 Katrina's" per a National Academy of Sciences (NAS) study, there is not sufficient liquidity / capacity in the worldwide insurance / reinsurance industries to pay off all "covered" claims. In short, you are not covered.
20 Katrina's equals about US$ 1 TRILLION.
So even if your company were to buy CME / EMP coverage within your Business Property, Business Continuity, Contingent Business Continuity, and D&O (Directors & Officers) policies, could you collect on it ?
More than likely, no. So insurance is, sadly, not insurance for CME / EMP.
And a holistic approach to planning for CME / EMP events is required.
Now to the news:
"Doomsday Coming for Catastrophic Risk Insurers?"
September 19, 2011
Interview with: Prof. Kenneth A. Froot, Harvard Business School
http://hbswk.hbs.edu/item/6774.html?wknews=09212011
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POSTED 22 Sept 2011 by:
David A. Palella
Founder
EMP DEFENSE COUNCIL(sm)
[ Electro-Magnetic Pulse Defense Council(sm) ]
San Diego, California
cell: 619-787-5767
email: dpalella@gmail.com
http://EMP411.blogspot.com
EMP Defense Council -- Preparing for Electro-Magnetic Pulse
http://www.linkedin.com/e/vgh/3702799/
(1) EMP Defense Council(SM) Highlights Calculable Risks of Solar Cycle Peak in 2013
http://www2.marketwire.com/mw/release_html_b1?release_id=784096
(2) The EMP Defense Council(C) Announces the Electro-Magnetic Pulse (EMP) Priority Hardening List Ranked by Industry Vulnerability, and Proposes a Markets-Based Approach to Addressing Solar or Nuclear EMP Events
http://www2.marketwire.com/mw/release_html_b1?release_id=708639
(3) Electro-Magnetic Pulse (EMP) Defense Council(C) Founded in San Diego, California on Pearl Harbor Day
http://www2.marketwire.com/mw/release_html_b1?release_id=695425
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