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Volcanic eruption:
Additional insight


Revealing the future of volcanic eruptions

Volcanic eruptions have a movie star quality about them, not least because for most people across the globe, they are not a part of their daily reality. However, of the approximately 1,500 active land volcanoes around the world, at least 16 are considered risky enough to warrant special attention. 


Not all volcanoes are created equal

The ‘Decade Volcanoes’, so-called because researchers began looking into them during the UN’s International Decade for Natural Disaster Reduction, are deemed highly dangerous because they fulfil the following criteria: people nearby will be in the direct line of material from the eruption such as ash or lava; it’s showing signs of activity and is in a populated area[10].


Volcanic eruption warning signs

While volcanic eruptions themselves are relatively rare events, “volcanic unrest” (such as seismic activity, ground deformation and uplift, volcanic gases, hydrothermal explosion, and landslides[11])  is far more common and we should be alert to the warning signs that a major eruption is geologically imminent. In the 1930s there were observations of volcanic unrest on the island of Montserrat for several decades. It wasn’t until between 1995-1997 that the major eruption happened which destroyed nearly two-thirds of the island and highlighted a lack of financial preparedness.[12]

The direct impacts of an eruption on the neighbouring land may be clear, and wider reaching effects may be less so, however recent eruptions have demonstrated just how widespread the literal and figurative fallout can be.


Beware the secondary impact

In 2010, when Iceland’s Eyjafjallajökull erupted, the people on the ground were safe however, the resulting ash from the eruption rose high into the stratosphere and covering most of the Arctic, northernmost North America and Europe, putting it directly in the path of one of the busiest aviation corridors on Earth. As aviation authorities deemed it too dangerous to fly through the cloud because of the risk to engines, much of European and northern airspace was shut down for six days. However, the financial impact was felt for much longer.


Volcanoes and the internet

The most significant eruption in terms of physical destruction and long-lasting impact was Indonesia’s Mount Tambora in 1815. The explosion could be heard in Australia and it caused famine, disease and temporary worldwide climate change. However, one of the most recent events off the coast of Tonga, the 2022 Hunga Tonga eruption, gives us an insight into how eruptions could easily cause global disruption.

While the resulting tsunami caused physical devastation in the local area, it was hard to get information in and out of the area due to extensive damage to undersea cables. As our modern world relies so heavily on digital technologies, widespread damage to these critical conduits could effectively shut down parts of the internet.

[10] https://www.sciencedaily.com/terms/decade_volcanoes.htm   

[11] Charlton, D., Kilburn, C. & Edwards, S. Volcanic unrest scenarios and impact assessment at Campi Flegrei caldera, Southern Italy   

[12] https://www.wtwco.com/en-gb/insights/2023/11/volcanic-risk-and-insurance-the-untapped-potential-of-downward-counterfactual-perspectives  

Glossary

A glossary of specific terms used in the scenario.

Decade VolcanoesA list of 16 volcanoes identified by the International Association of Volcanology and the Chemistry of the Earth's Interior (IAVCEI) as research priorities, as a result of their history of large, destructive eruptions and proximity to densely populated areas[13]
Ejecta column
The material explosively ejected from a volcano.
Pyroclastic flowDense, fast-moving flow of solid lava, ash and gas. Likely to destroy anything in its path.
Volcanic bombs
Pyroclastic rock projectiles ejected from a volcano during explosive eruptions.
Lahar flow
Mud and/or debris, including pyroclastic debris, flowing down the slopes of a volcano. Can happen long after the eruption itself.
Lava flowMolten or partially molten rock (magma) expelled from a volcano during an eruption.
Tephra
Fragments of rock ejected into the air from an erupting volcano.
Radiative forcingThe scattering of solar radiation by ash or sulphur clouds formed after an eruption.
Volcanic winterA reduction in global temperatures caused by sustained radiative forcing.
Stratovolcano
A conically shaped volcano formed of many layers of hardened lava and tephra.

[13] https://geologyscience.com/geology-branches/volcanology/decade-volcanoes/  

Explore the impact of a volcanic eruption

The scenario narrative

Understand how these events could take place

The economic impact

How vulnerable could the economy be to a major volcanic eruption?

The role of insurance

How can insurance help build resilience against the devasting impacts of natural perils like volcanic eruptions?

Disclaimer

This report has been produced by Lloyd's Futureset and Cambridge Centre for Risk Studies for general information purposes only. 

While care has been taken in gathering the data and preparing the report Lloyd's and Cambridge Centre for Risk Studies do not, severally or jointly, make any representations or warranties on behalf of themselves or others as to its accuracy or completeness and expressly exclude to the maximum extent permitted by law all those that might otherwise be implied.

Lloyd's and Cambridge Centre for Risk Studies accept no responsibility or liability for any loss or damage of any nature occasioned to any person as a result of acting or refraining from acting as a result of, or in reliance on, any statement, fact, figure or expression of opinion or belief contained in this report. This report does not constitute advice of any kind.

Note that this report does not seek to replace or inform any of the mandatory scenarios which Lloyd’s publishes to support the Realistic Disaster Scenario exercises managing agents are required to undertake in respect of the syndicates managed by them.