artemis.bm - July 25, 2017
Risks to the electric grid due to severe weather, natural catastrophes and climate change can cause losses in the billions of dollars, and while threats make our energy future more uncertain there is a role for risk transfer and potentially the capital markets in helping to stave off economic disruption.
A new report published by reinsurance firm Swiss Re but authored by students at the Johns Hopkins University School of Advanced International Studies (SAIS) explains that the electric grid is among the most important pieces of our critical infrastructure, but is also one of the most exposed to natural disasters, weather and climate related threats.
These threats aren’t always covered effectively either, with electrical utilities often retaining risks related to peak catastrophe or severe weather events and rarely carrying enough business interruption coverage to ensure they have the financial liquidity required post-disaster and are able to offer continuity of service to their customers.
