Atmospheric and Environmental Research and The Hartford Steam Boiler Inspection and Insurance Co. have announced a strategic alliance that will provide a technology and services solution to comprehensively understand and assess blackout risk in the United States. The technology will be used by insurers and reinsurers, commercial and industrial firms, and other businesses.
Electrical blackouts are on the rise across the U.S., costing businesses and consumers more than $100 billion annually and inconveniencing millions of people. So far, the market lacks a widely available and dependable tool to calculate the financial consequences of power outages, making it more challenging for utilities, businesses, and insurance companies to assess potential losses from multiple perils.
“Severe weather and other factors have increased the number and duration of blackouts, causing disruptions and economic losses to grow exponentially,” said Greg Barats, HSB president and chief executive officer. “HSB and AER are commercializing the blackout risk data and technologies that our firms built, calibrated and applied within our businesses over the past decade. Our joint teams will now make it possible for stakeholders to plan for widespread blackouts caused by a broad range of perils to help clients minimize and manage the impact across all lines of business.”
“The strategic alliance between AER and HSB brings unique expertise and experience to the blackout assessment field,” said Ron Isaacs, AER president and chief executive officer. “The alliance enables a significant advance in this area and will be a great benefit to the thousands of organizations and tens of millions of people affected every year by blackouts. New technology and tools are essential as weather events become more extreme and frequent, the power grid ages, and other risks threaten our power supply.”
Both HSB and AER have a long history in risk analysis services. HSB, part of Munich Re, is a leading engineering and technical risk insurer in North America and the largest insurer of electrical equipment. AER, a unit of Verisk Analytics, is a leading provider of climate and environmental risk management solutions. The technology will be built upon the 147-year foundation of HSB’s technical knowledge and leadership in specialty insurance related to the failure of critical infrastructure and AER’s expertise in natural hazard analysis and remote sensing.