[meteorite-list] Insurer's Scientists Ponder The Threat Of Meteor Disaster

From: Ron Baalke <baalke_at_meteoritecentral.com>
Date: Thu Apr 22 10:02:28 2004
Message-ID: <200203141716.JAA20199_at_zagami.jpl.nasa.gov>

http://www.ctnow.com/business/hc-meteorite0314.artmar14.story?coll=hc%2Dheadlines%2Dbusiness

Space Bombardment Not So Far-Fetched?
Insurer's Scientists Ponder The Threat Of Meteor Disaster

By DIANE LEVICK,
The Hartford Courant
March 14, 2002

Insurers are thinking about the unthinkable in the wake of Sept. 11 - and
not just terrorism. Now they're being urged to consider the financial threat
posed by a "bombardment from space."

No, not from space aliens, but from meteorites and "space rubbish" such as
old satellites, rocket stages and space station waste.

The insurance industry has underestimated the meteorite risk and could be
on the hook for much of the damage from a hit to the Earth because policies
don't exclude it, said a report Wednesday by scientists at Munich Re, the
world's largest reinsurer.

The stern warning, however, isn't expected to lead U.S. insurers to rewrite
policies to exclude such coverage or raise rates specifically for meteorite
risk.

A meteor is believed to have wiped out the dinosaurs tens of millions of
years ago, and about 100 meteorite crashes on Earth were documented
between 1900 and 2001. One in 1908 in Siberia felled or damaged trees in
an area as large as Berlin, Moscow and London combined, the report noted.

So the risk isn't just fodder for films such as "Deep Impact," which slightly
missed the mark by toppling the World Trade Center with a comet-driven
sea wave.

With estimates for Sept. 11 claims ranging anywhere from $30 billion to $70
billion, Munich Re warned in its report on natural catastrophes that insurers
need to rethink the potential for future losses. As a reinsurer, Munich Re
assumes some of the risk and premiums from insurance companies and
takes a hit in many disasters.

The probability of a meteorite strike is very low, but "if a densely populated
area were directly hit by a meteorite or by a sea wave after a meteorite
crash, this could result in a loss accumulation of previously unknown
dimensions," Munich Re said.

A "bombardment from space" could mean massive destruction due to
pressure and shock waves, heat waves, fire, tsunamis and climate changes,
the company noted.

The industry must consider whether it's equipped to deal with such a
disaster, "which is to be doubted," the report concluded.

U.S. property-casualty insurers do realize a meteorite crash could be
"potentially very very devastating," but "I don't believe this is a front burner
issue for the industry at this time," said Robert P. Hartwig, vice president
and chief economist for the Insurance Information Institute in New York.

"It may be one of those issues that requires an event to occur before the
[risk] is explicitly priced in," Hartwig said.

The Hartford Financial Services Group Inc. said Wednesday that it
recognizes meteorite crashes are a serious branch of study but "frankly
meteorites and meteorite exclusions are just not on our radar these days."

The Hartford and other insurers are more concerned about getting Congress
to create a federal backstop for future terrorism claims.

Hartwig points out the futility of worrying about insurance if there's another
meteorite strike of the dinosaur-extinction level.

"Whether your insurance claim will be paid is the least of your concerns,"
Hartwig said. "Being vaporized is your first concern."
Received on Thu 14 Mar 2002 12:16:18 PM PST