The eruption and resulting lava flows destroyed nearly 1,000 homes and large areas of infrastructure

The eruption of the Cumbre Vieja volcano, located on the La Palma Island in the Canary Islands archipelago of Spain, will likely result in hundreds of millions of euros in economic losses, according to Aon’s Impact Forecasting.

The volcano began a fissure eruption from several vents, and as of 5 October, 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.

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-modelled perils.”

”While catastrophe model coverage has continued to grow, gaps remain in having a full set of modelled 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.”