Blackouts during the last ten years in Europe and Northern America have demonstrated an increasing likelihood of supra-regional blackouts with accompanying large economic losses. The earthquake, tsunami damage and power shortages that idled thousands of Japan’s factories in 2011 highlighted its role as a key and – sometimes the only – source of auto parts, graphics chips and other high-end components. Many manufacturers are currently using up the inventories that they had in stock before the earthquake. A similar situation could occur as a result of a larger power outage and this risk may further increase in the future.
This joint study presented by Allianz Global Corporate & Specialty and the Chief Risk Officer Forum explores risk management methods and emphasizes the insurance industry’s options to expand coverage based on physical damage and to consider new non-physical damage insurance solutions.