A major solar storm could inflict massive global economic losses by damaging critical infrastructure such as energy grids and satellite networks, and disrupting financial systems, according to Lloyd’s. 

The global economic impact could reach $US2.4 trillion ($3.8 trillion) over a five-year period, with an expected loss of $US17 billion ($26.9 billion), Lloyd’s says in its latest systemic risk scenario publication. 

The probable losses are modelled across three severity levels, ranging from $US1.2 trillion ($1.9 trillion) in the least severe scenario to $US9.1 trillion ($14.4 trillion) in the most extreme, equivalent to a reduction in global gross domestic product of between 0.2% and 1.4%.   

A solar storm is a sudden and intense burst of radiation and energetic particles blasted from the Sun. If large enough and directed towards Earth, the resulting “space weather” has the potential to severely damage critical infrastructure and create significant disruption across multiple industries and everyday activities, says Lloyd’s. 

North America is identified as the region likely to be most financially impacted by the scenario, suffering a potential economic loss of $US755 billion ($1.19 trillion) over the modelled five-year period. 

“How quickly a city or country recovers from the effects of the scenario largely depends on their preparedness,” Lloyd’s says. “The speed and scale of recovery from the initial GDP shock would be dependent on the socioeconomic resilience of each country and its position relative to geomagnetic exposure.” 

Click here for the publication.