Lloyd’s Warns of Extreme Space Weather Risks With $2.4 Trillion Economic Impact Projection

Lloyd’s, a leading global insurance marketplace, has published a new systemic risk scenario assessing the potential economic consequences of an extreme solar storm. The analysis estimates a global economic loss of $2.4 trillion over five years, with expected losses reaching $17 billion if such an event were to occur today. The study, conducted in partnership with the Cambridge Centre for Risk Studies, evaluates three severity levels, with potential losses ranging from $1.2 trillion to a catastrophic $9.1 trillion—equivalent to up to a 1.4% reduction in global GDP.

The report highlights North America as the most vulnerable region, facing a projected $755 billion economic loss, followed closely by Europe at $697 billion. Asia-Pacific and Greater China are also expected to experience substantial financial impacts. The disruption from a solar storm could severely affect power grids, satellite communications, global positioning systems (GPS), and financial transactions, leading to widespread business interruptions. A Carrington-class solar event—comparable to the powerful geomagnetic storm of 1859—could cause massive infrastructure failures, prolonged blackouts, and severe logistical disruptions across multiple industries.

To address these risks, the insurance industry, including Lloyd’s, provides a range of specialized coverage options such as energy insurance, business interruption insurance, and aviation insurance. Lloyd’s already insures nearly one-third of the global space market, offering coverage for satellites and related risks. The report underscores the growing importance of proactive risk management, urging businesses and governments to enhance resilience against space weather threats.

As part of its awareness campaign, Lloyd’s has also launched a photography exhibition, Life in the Sun’s Atmosphere: From Disruption to Resilience, by renowned photographer Max Alexander. The exhibition explores the impact of solar activity on Earth’s infrastructure and highlights ongoing efforts to mitigate these risks. The timing of this initiative coincides with the peak of Solar Cycle 25 in 2025, a period of heightened solar activity that could increase the likelihood of extreme space weather events.