Volcanic eruption, a serious but uninsured risk
According to a study conducted by Swiss Re, a volcanic eruption affecting a large city could cause up to 30 billion USD of economic losses. Apart from the direct damage that a volcano could cause in a given city, this risk could disrupt the supply chain in several other parts of the world.
Despite the severity of the risk, few exposed countries have guarantees covering the threats caused by an eruption. Only Iceland currently detains a compulsory volcano insurance. It is up to insurers to better exploit this niche.
According to the same source, one out of the seven largest megacities in the world, is located within a radius of 150 km around an active volcano, while one billion people live in an area at risk. Among the large cities expopsed: Tokyo (Japan), Naples (Italy), Manila (Philippines), Managua (Nicaragua) and Jakarta (Indonesia).
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