Cumbre Vieja volcano a timely reminder on challenges of non-modeled perils

The ongoing eruption of the Cumbre Vieja volcano, located on the La Palma Island in the Canary Islands archipelago of Spain, should serve as a pertinent reminder of the challenges posed by non-modeled perils, according to a report by  Aon.

What began as a fissure eruption from several vents, resulting lava flows destroyed nearly 1,000 homes and large areas of infrastructure, including approximately 30 kilometers (18.6 miles) of roads. The event prompted evacuation of thousands of residents and will likely result in hundreds of millions of euros in economic losses. No fatalities were reported.

The comment was made in Aon’s latest monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurred worldwide during September 2021.

Other notable events included Hurricane Nicholas, which made landfall in Texas, in the US, on Sept. 14 as a Category 1 storm. Days of heavy rainfall associated with the slow-moving cyclone prompted notable flooding and flash flooding across parts of Texas and Louisiana. Total economic losses were estimated at upwards of $1 billion. Less than half was expected to be covered by public and private insurance.

Also in the US, the Fawn Fire was ignited on Sept. 22 and burned thousands of acres (hectares) near the Shasta-Trinity National Forest in Shasta County, California. At least 185 structures were destroyed. For the season, California wildfires have left more than 3,600 structures damaged or destroyed with a multi-billion-dollar economic cost expected.

Michal Lörinc, senior catastrophe analyst for Aon’s Impact Forecasting team, said: “The ongoing eruption of the Cumbre Vieja volcano reminds the insurance industry of the challenges posed by non-modeled perils. While catastrophe model coverage has continued to grow, gaps remain in having a full set of modeled solutions to accurately assess various types of risk in all territories. Weather and climate perils often generate most headlines, but geologic or seismic risks remain worthy of heightened focus.”

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