Risk Management Solutions, Inc. recently published a report title Comet and Asteroid Risk where they analyzed the 1908 Tunguska, Siberia explosion that devastated a remote area of Siberia. It was estimated to be 1,000 times as powerful as the nuclear bomb dropped over Hiroshima in 1945.
This paper is pretty cool. The authors describe from a property and casualty insurance perspective, the difference between massive, medium and small objects colliding with Earth’s surface:
- Massive: 1 km in diameter or larger would have direct impacts on a continental scale, as well as global consequences with social, economic, and political implications. This is one of those 1:65 million year events that wiped out dinosaurs which is “far beyond the scope of the insurance system”.
- Medium: 10m – 1000m in diameter like the Siberia event “could lead to hundreds of thousands of casualties and hundreds of billions dollars of damage. It would also cause losses beyond the capacity of the insurance market.”
- Small: less than 10m in diameter; apparently we get a few of these annually.
Finally, the authors describe the losses if a Siberia event occurred today over NYC. While the probability of any asteroid hitting Earth is super, super, super tiny, the likelihood of hitting a city like NYC right in the middle of Times Square is exponentially smaller (unless of course this is a Hollywood movie where these events occur quite frequently).
From a risk management perspective, I would recommend against including this sort of thing on your risk register because there isn’t anything you can do about treating it and your Board will think you are nuts. Just accept (don’t write it down) and move on to risks you can do something about.
Good post, you have gotta love these guys for highlighting a new risk area.
Only just discovered your blog, and reposted on your Risk Software issue. Keep up the good work.
Would love to say more, but have to update my risk register – perhaps if we built a dome over all our buildings, or hired Bruce Willis to head up our new Asteroid Resilience unit …..
Ken, thanks for your comments.
Clearly, a dome over all our buildings is a legitimate risk treatment however, it is prohibitively expensive; risk management helps us prioritize our risks and allocate our scare resources more effectively.
Domes would be super cool though.
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