Verisk Climate and The Hartford Steam Boiler Inspection and Insurance Co. (HSB) have introduced new technology and consulting services that help insurers and businesses predict the likelihood, severity, and financial exposure of U.S. electrical blackouts, which cause more than $100 billion in economic damages each year.
The Blackout Risk Model is offered through a consulting service provided by Verisk Climate and HSB. The technology can be used to assess the risk of electrical blackouts from hurricanes, winter storms, severe thunderstorms, peak power demands, human error, and other factors.
The technology incorporates data and analysis from HSB and Atmospheric and Environmental Research (AER), a unit of Verisk Climate, including a database of possible weather conditions, satellite analysis of trees near distribution lines, proprietary knowledge of the electrical grid infrastructure, and detailed economic data.
“It was not feasible for a retailer or manufacturer to conduct a quantitative cost-benefit analysis associated with backup power facilities and emergency response actions,” said Kyle Beatty, president of Verisk Climate, a division of Verisk Analytics. “By applying this technology, businesses can gain insight into the potential for their distributors or suppliers to lose power based on where they are located within the electrical grid network.”
The Blackout Risk Model can help insurers, businesses, and government emergency planners identify high-risk areas so they can better manage their risk and plan for a response when power is disrupted by natural or man-made events.
The new modeling tool, which combines the technologies built independently over the past decade by HSB and AER, enables businesses to assess how electrical blackout risk varies by geographic region or grid area, the number of people and businesses likely to be without power in a particular blackout, and how long the outage might last for specific groups of customers. Blackout Risk Model is a trademark of HSB and Atmospheric and Environmental Research, Inc.
Verisk Climate provides software, data, and analytics for enterprise climate risk management. Verisk Climate draws on disaster risk models from AIR Worldwide, vertically integrated data from Verisk Analytics, and environmental data and information from its Atmospheric and Environmental Research (AER) unit. Verisk Climate is a division of Verisk Analytics.
Hartford Steam Boiler (HSB), a member of Munich Re’s Risk Solutions family since 2009, is an engineering and technical risk insurer providing equipment breakdown insurance products, other specialty coverages, and related inspection services and engineering consulting.