A Renewable Impulse
Every cynic that derides the promise of renewable energy should have a chat with the Swiss pilot, businessman and adventurer Andre Borschberg.
Borschberg, along with his partner and countryman Bertrand Piccard, successfully piloted the first solar plane to fly across the United States in the spring and early summer of 2013. And insurance was there to help make it happen.
Swiss Re Corporate Solutions provided hull insurance, aircraft liability and crew personal accident coverage for the Solar Impulse, a solar-powered plane conceived, engineered and built in Switzerland.
After shorter flights in Europe and North Africa, the entirely solar-powered plane and its pilots took on the adventure of flying from the west coast to the east coast of the United States in five stages.
The plane, which has two propellers and is self-powered on takeoff, left Mountain View, Calif., on May 3. After stops in Phoenix, Dallas, St. Louis, Cincinnati and Washington, D.C., Solar Impulse arrived in New York on July 6, completing its adventure across America.
The ultimate goal of the project, a primary premise of which is to realize the promise of renewable energy, is an around-the-world flight sometime in 2015.
The insured value of the plane is some $9.17 million, according to its Zurich-based insurer. The total value of the project to date is some $112 million.
HB-SIA, the prototype that is crossing the United States, was not built to fly around the world, but data collected from the flight will be used to construct HB-SIB, the prototype that will be built for the global voyage.
There was no small amount of pressure on Borschberg and Piccard as they took on this cross-country trip. Investments from as many as 80 companies went into the plane, which has a 208-foot-wide wingspan, and yet at 3,527 pounds, weighs only as much as the average car.
The lightness of the plane and its great width require a soft touch at the controls. The pilots must act with deliberation and under no circumstances can they overcorrect.
One of the beauties of recording modern adventures is that, in many cases, a journalist can communicate with the explorer in real time. So it was on June 13, that Risk & Insurance® through its relationship with Swiss Re, was given the opportunity to connect by telephone via satellite with Borschberg as he flew the Solar Impulse from St. Louis to Cincinnati.
“What is interesting about the plane is that you discover a whole new way of flying,” said Borschberg, who despite long hours at the controls of the single-passenger plane sounded relaxed and happy.
The plane is equipped with four brushless motors and is powered by more than 11,500 solar cells on its wingspan and horizontal stabilizer. It cruises at around 40 mph, which gives the pilots plenty of time for reflection.
“This is an airplane where duration is not a problem,” Borschberg said. “Of course, we fly at low speed but we can fly day and night; there are no limits,” he said.
“So time is not an issue anymore and you can enjoy what you do. We are not in a hurry. A day like today is truly an experience. It is a possibility to enjoy each moment and to be present in each moment,” he said.
As he flew on June 13, Borschberg enjoyed good flying conditions, with relatively clear skies and manageable winds. One of the purposes of the United States flight was to test the plane and its support team in different weather conditions.
Earlier, as the team prepared to fly to St. Louis, the convergence of an increasingly volatile climate driven by a warming planet collided with the ambitions of this Swiss project dedicated to the promise of renewable energy.
On May 31, the airplane hangar in St. Louis that had been tapped to serve as the temporary home of HB-SIA was damaged by a tornado. The Solar Impulse team adjusted, inflating a temporary hangar that stored the plane snugly.
“That was one of the goals of the flight here across America … to be exposed to different weather systems, different conditions, from the ones that we experienced in Europe and North Africa already, so that was part of the training,” Borschberg said.
The team behind this record-breaking flight is an impressive and well-qualified one. Borschberg served as a Swiss fighter pilot for more than 20 years. In addition, he earned a Master’s in Management Science from the Sloan School at
MIT and has been involved in numerous aviation start-ups.
Piccard, who comes from a family of scientists and adventurers, gained fame as the winner of the Chrysler Challenge, the first transatlantic balloon race in 1992. He built on that feat by being the first person to pilot a balloon around the world in 1999. Piccard, chairman of the Solar Impulse project, began thinking about a solar-powered plane in 2003, but he needed a lot of help to see his dream realized.
Major corporate partners on the project are Frankfurt, Germany-based Deutsche Bank, the Belgian chemical company Solvay S.A., Swiss watchmaker Omega S.A. and the Swiss elevator maker Schindler.
Additional corporate partners include Swiss Re, Bayer, Swisscom and Altran, but there are more than 80 companies associated with the project. That’s in addition to a team of scientists and engineers based at the École Polytechnique Fédérale de Lausanne in Switzerland.
Apart from the tornado that trounced the hangar in St. Louis, the trip across the United States was an unqualified success.
“Touch wood, cross my fingers but the airplane is doing great,” Borschberg said.
“The solar technology is something which is fully reliable. You cannot wear this out … it lasts,” he said.
“Electric motors also have few moving parts, so that is a big, big advantage. They function at low temperatures, so you don’t have the thermal shock that you have with other technologies.”
In its brief life, Solar Impulse already possesses several aeronautical records for a solar plane, including an absolute height of 30,300 feet and duration of flight at 26 hours, 10 minutes and 19 seconds.
Both Borschberg and Piccard are well-seasoned pilots, which is an advantage because the physical demands of flying Solar Impulse are considerable.
The plane can only carry one person, so there is no one to relieve the pilot, even as he stays at the controls for 24 hours or more at a time.
For Borschberg, the sheer joy, not only of flying itself but of being a pilot on this particular project are more than enough to carry him along.
“Of course Bertrand and myself, we are really passionate about the work we are doing. We are passionate about flying and when you truly like what you are doing, you have a different kind of energy,” he said.
“Second, we are carried by the potential of this airplane and also by the ideal that is around that,” he said.
“I think the other part, of course, is that flying is a wonderful way to look at the earth and see the beauty of it. And so when you fly, you are captivated by that.
“It can be by day, it can be by night. It can be at sunset, it can be at sunrise, so all of this makes the trip truly memorable.”
Raining Down Destruction
When the asteroid strikes earth’s atmosphere, it is traveling at approximately 56,000 mph. At 50 meters to 60 meters wide, it is not large enough to wipe out humanity or irrevocably alter the tilt of the Earth’s axis or its orbit. But it’s going to do plenty of damage, particularly because of where it is headed: right at New York City. The asteroid, made of rock not too dissimilar from the rocks found on Earth, begins to break up nearly 200,000 feet in the atmosphere. About three miles up, or 18,800 feet, the projectile bursts into a cloud of fragments.
When it does that, it releases the power of 1,000 A-bombs — 10 megatons of TNT.
On the ground, the sound of the explosion reaches 105 decibels, enough to cause people to cover their ears in pain. That is, if the explosion’s incendiary heat and blast wave with its 500 mph winds don’t reach them first.
For residents of the metro area about 25 miles from the detonation site, the fireball looks like a second sun in the sky. The pressure from the explosion reaches them with 70 mph winds, though, wreaking havoc with homes and small business structures.
For about 19 miles surrounding the blast site, the fireball inflicts third-degree burns and ignites clothes.
Within 10 miles — reaching into the Bronx to the northeast, Brooklyn to the south and into Queens to the west — the blast wave reaches even higher pressure. That level of pressure is enough to generate wind speeds of a Cat-5 hurricane, strong enough to raze or severely damage factories, offices and residences.
The air is filled with glass, bricks and jagged concrete, and those half of the Outer Borough residents who do not die are surely injured.
For those within 2.5 miles of the blast, the news is worse. About 17.6 seconds after the explosion, come those 500+ mph winds — arriving faster than the speed of sound. The effects of this phenomenon are not for the faint of heart to consider, but take the worst tornado stories imaginable, multiply by two, and overlay them across almost all of Manhattan.
The force tears already scorched flesh off bones and limbs from bodies. Windows and walls of buildings implode. Multistory, reinforced concrete buildings collapse. Nothing is left of wood frame buildings. Highway truss bridges collapse. Nearly every tree in Central Park is leveled. And what falls down become missiles that kill and maim.
Perhaps luckiest are those closest to ground zero. Within the first second of the detonation, the heat energy within a mile turns flesh into steam, clean to the bone. Assume near total demolition at ground zero with fatalities as good as 100 percent.
Research for creating this description included information from the Earth Impacts Effect Program sponsored by the Imperial College London and Purdue University, It also used research provided by the Nuclear Weapon Archive. In its scale and effects, an asteroid impact would be similar to a fusion bomb.
But the most relevant source for the above scenario was a research report published in 2009 by RMS, the catastrophe modeling solutions provider.
The RMS report explored a 1908 event, the Tunguska asteroid impact in Russia at its 100th anniversary. In that strike, a mid-size asteroid (about 50 meters in diameter) exploded 3 to 5 miles above the Siberian forest. It leveled trees across 770 miles, and the pressure waves generated were measurable around the world.
Eyewitnesses were few and far between, but the few recorded for history including one person who experienced the event from 40 miles out and said, “at that moment, I became so hot that I couldn’t bear it, as if my shirt was on fire.”
The modeler asked: What if this occurred above New York City?
To calculate the probable maximum loss, RMS placed the proposed Tunguska damage footprint over Manhattan. It assumed a mean damage ratio, fatality rate and injury rate within the inner footprint of destruction to be 70 percent, 50 percent and 40 percent, respectively. In the outer footprint, they were 30 percent, 2 percent and 35 percent, respectively.
Then, RMS populated its map of Manhattan with datasets for population concentrations and insured assets. As much as $760 billion in property exposure and 3.61 million people exist within the outer swath of destruction, and with the inner ring of fire and death, $1.38 trillion and 6.25 million people.
According to RMS calculations, that translated to property losses of $1.19 trillion, 3.2 million deaths and 3.76 million injuries.
Such a biblical tally — and indeed, an asteroid impact may have caused the flood behind Noah’s ark — leads us to a question: Would property insurance companies even have to pay such a massive bill?
When a meteor exploded over Chelyabinsk, Russia, on Feb. 15, 2013, this question was raised. Michael Barry, vice president for media relations at the Insurance Information Institute, was quoted in Time.com as saying, at least with homeowners policies, “it’s got to be a direct hit” to trigger coverage. If an asteroid were to explode miles in the air and level everything below it, “the coverage is going to be open to interpretation.”
RMS conceded in its report that “it is unclear if, on any current contractual grounds, insurers would exclude damage caused by such a peril.”
Yet, the consensus appears to be that comprehensive commercial multiperil and all-risk policies ought to cover damage from an asteroid blast, unless specifically excluded.
“Generally, losses from the impact of meteorites or asteroids are covered in standard insurance policies. However, differences do exist from country to country,” was the simple statement put out by Munich Re after Chelyabinsk.
In Earth’s history, larger strikes have happened. The dinosaurs were made extinct by an asteroid that could be measures in kilometers, not meters.
If that were the case, “it’s a whole new world the next day,” said Lou Gritzo, vice president of research at insurer FM Global. It’s literally a whole new world.
That sort of impact would extend beyond the affected region and country, and have geopolitical security implications. Countries might cease to exist, let alone insurance companies.
A Tunguska-sized space rock could have ripple effects beyond the New York region, given the “brittle” economic situation in today’s over-connected financial and business worlds, Gritzo said. The word he used to describe such a threat is “reset” — to geopolitical and economic systems, but also to the well-being and daily lives of people on the East Coast and the insurance industry.
After a significant event like this, the insurance industry would be “really in ‘only the strong survive’ mode,” Gritzo said.
We can’t define “the strong” as those specifically prepared for an asteroid strike. As Robert Muir-Wood, chief research officer at RMS, explained, no one on the insurance side has a strategy to handle such an event at the moment.
Nor should they. It’s not practical to chase every Black Swan that flies under the sun.
If you’re running an insurance or reinsurance company, said Muir-Wood, you have to decide what is the risk threshold that you’re worried about and manage to that risk, so you will survive.
“Generally,” said Hélène Galy, head of proprietary modeling, managing director, Global Analytics, at Willis and the Willis Research Network, “when we provide catastrophe modeling results to clients, for example for a flood model, they are more interested in the low return periods, which should match their recent loss experience. Typical return periods are 100 year and 250 year.”
Gritzo at FM Global said that company underwrites to the 500-year risk level and advises its clients to protect their own properties to that 0.2 percent annual probability.
The odds of a Tunguska-like event striking a major urban area — let alone the major urban area in the United States — are very high.
The frequency of rocks this size hitting Earth in any one place, however, could fit within this 500-year window. According to the Asteroid Terrestrial-impact Last Alert System (ATLAS) at the Institute for Astronomy at the University of Hawaii — its purpose: to identify these rocks before they hit — “city killer” sized asteroids arrive once every few hundred years.
Given that location uncertainty but surety of occurrence, standard rules of catastrophe management apply for reinsurers and insurers. Prepare for the disaster that really scares you, and likely you will be relatively prepared when another disaster strikes.
One such rule of the “only the strong shall survive” school of thinking is diversity — away from insurance lines like property and away from concentrations of underwriting in any particular urban area or region.
“In this extreme scenario, losses would be so regional and total that a number of regional insurers would probably disappear. Reinsurers with enough diversification should survive,” said Galy.
She added, “insured losses would be dwarfed by economic losses, so it is the economy and civil society that would be most impacted.”
It would be a “reset” unlike anything we have seen.
“It would look a bit of a mess,” said Muir-Wood. The nearest historical equivalent would be the Tokyo earthquake in 1923, when the city burned and total insured losses were beyond insurance coverage.
The government then allowed insurers to pay back as much as they could without going under. In that way, it could be comparable to another recent Black Swan — the 2007-2008 financial crisis.
As long as it is still standing, the U.S. government would not sit by and let all the big insurance companies disappear, like the dinosaurs did.
Diversifying Top Management in Workers’ Comp
The panel at the inaugural Women in Workers’ Compensation (WiWC) Forum. From left to right: Eileen Ramallo, Elaine Vega, Nina Smith-Garmon, Nancy Hamlet, Michelle Weatherson, Nanette de la Torre, Danielle Lisenbey.
Across the country, the business community is engaged in a robust conversation about women being under-represented among c-level positions.
Why aren’t more women breaking into upper management roles? Does gender bias still exist? And, perhaps more importantly, what can women and men do to add more diversity to top leadership ranks?
Elaine Vega and Nancy Hamlet, of Healthcare Solutions, the Duluth, Ga.-based health services provider to the workers’ compensation and auto liability/PIP markets, have discussed the issue between themselves many times over the years.
The duo agreed that starting an industry-wide conversation would be an effective start to addressing the challenge. After three years of internal discussions, the inaugural Women in Workers’ Compensation (WiWC) Forum became reality. Judging by the attendance, content and feedback, it was an auspicious, very successful, debut.
Specifically, Healthcare Solutions and LRP Publications teamed up at the National Workers’ compensation and Disability Conference (NWCDC), held Nov. 18-21, 2014 in Las Vegas, to present the first WiWC event focused on the development of women as leaders within the industry. The WiWC debut featured a keynote speaker, a panel discussion and a networking cocktail hour.
“We believe this is just the beginning for the WiWC organization,” said Hamlet, senior vice president of marketing, adding that the event’s main theme was the conversation regarding challenges that still exist for women in the workplace is “current, real … and relevant.”
Originally the forum was allocated a room to hold 150 people. Vega and Hamlet worried about the room being too large, so they asked LRP what the contingency would be to make the room smaller if they couldn’t fill it. They needn’t have worried, as more than 400 women, and some men as well, registered and attended, requiring an even larger room.
“Clearly, the topic is relevant and there was plenty to discuss,” said Vega, senior vice president of account management.
Hamlet explained that WiWC was formed to create an open forum to promote a strong sense of community and support for current and future female leaders in the workers’ compensation industry. Going forward, the WiWC forum will provide insight and ideas with opportunities for members to:
- Engage … with accomplished industry professionals and build lasting relationships.
- Enrich … their knowledge base with tactical insights from speakers and panelists.
- Explore … opportunities and challenges facing women leaders today.
- Encounter … senior executives’ perspectives on leadership.
- Examine … leadership strategies and how to effectively apply the strategies.
- Empower … themselves and others to achieve success and groundbreaking results.
At the inaugural event, keynote speaker Peggy Holtman, co-author of “Leading at the Edge: Leadership Lessons from the Extraordinary Saga of Shackleton’s Antarctic Expedition,” discussed how a seemingly unconnected historical event can offer critical lessons on leadership in the workplace, especially for women looking to move into top executive spots.
After Holtman’s talk, a panel discussion, moderated by Vega, offered the perspectives of five workers’ compensation industry executives on ways in which women can navigate past the glass ceiling. Panelists included Eileen Ramallo , EVP Healthcare Solutions; Danielle Lisenbey, CEO Broadspire; Nanette de la Torre, VP Zenith; Nina Smith-Garmon, EVP Mitchell International; and Michelle Weatherson, Director, Claims Medical and Regulatory Division, State Fund of Calif.
The panelists discussed a wide range of topics related to women in workers’ compensation. For example, one topic focused on the need to take the big risks when it comes to moving past workplace barriers. Other topics included the importance of women in higher positions serving as sponsors and advocates for younger, less experienced women; and the impact of industry consolidation on women’s careers and how to best manage that change. Another topic was how women could best master conflict and emotions in the workplace.
“What’s clear is conflict has to be managed; it will not go away. It will only get worse,” said Healthcare Solutions’ Ramallo. “It then can create other rifts that won’t necessarily be visible immediately, but can have a very large impact. You have to be able to understand what it is early on from another’s perspective, why the situation exists, and then encourage and try to resolve a conflict situation, whatever may be driving it.”
In the wake of the first WiWC Forum, Hamlet noted that while there are countless general reports showing that women have not yet achieved equal representation in top leadership positions in the workplace, studies deal with averages rather than individual stories. And while women must continue to look at the data and work toward closing the gap, hearing from accomplished women in the workers’ compensation industry at NWCDC drove home critical messages on a person level.
Today, Vega and Hamlet are looking to expand WiWC to make it “truly owned” by the industry. For example, they expect to recruit companies interested in becoming sponsors, forming an advisory council, creating a charter and discussing future possibilities for the organization on both the national and regional levels.
“Much remains to be done, but I have confidence that we will come together and make the organization stronger so that it prospers for years to come,” Hamlet said. “After all, it’s clear that our industry is filled with talented women who can make things happen!”
Vega added that WiWC has already received requests to live stream the event in the future, so it will examine the feasibility of that option in an effort to be even more inclusive.
“We have a shared vision for improving opportunities for current and future women leaders in workers’ compensation,” Vega said. “It doesn’t matter our gender or our title, it’s all about supporting the greater vision. As was said several times at the event, this is just the beginning. We hope more women and men will join us in this continued dialogue.”
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Healthcare Solutions. The editorial staff of Risk & Insurance had no role in its preparation.