15 Sep 2023
 | 15 Sep 2023
Status: this preprint is open for discussion.

Probability estimation of March 1989-like geomagnetic storms and their relevance for the insurance industry

Deniz Güney Akkor and Halit Ünal Özden

Abstract. This study employs Extreme Value Theory (EVT) to estimate the probability of geomagnetic storms of comparable magnitude to the March 1989 event and to assess the implications of such storms for the insurance industry. To calculate return periods for extreme events, historical Dst data from the World Data Centre for Geomagnetism are combined with the Generalized Extreme Value (GEV) distribution, maximum likelihood estimation, and the Peaks Over Threshold (POT) approach. The findings suggest that there is a 7.14 % to 8.33 % chance of a geomagnetic storm of equivalent severity occurring during the next 70 years (with a 95 % confidence interval). This study helps us understand the frequency and severity of extreme geomagnetic storms and helps the insurance industry make judgments about risk management.

Deniz Güney Akkor and Halit Ünal Özden

Status: open (until 29 Oct 2023)

Comment types: AC – author | RC – referee | CC – community | EC – editor | CEC – chief editor | : Report abuse
  • RC1: 'Comment on egusphere-2023-1800', Anonymous Referee #1, 24 Sep 2023 reply
    • AC1: 'Reply on RC1', Deniz Güney Akkor, 25 Sep 2023 reply
      • RC2: 'Reply on AC1', Anonymous Referee #1, 29 Sep 2023 reply
        • AC2: 'Reply on RC2', Deniz Güney Akkor, 29 Sep 2023 reply

Deniz Güney Akkor and Halit Ünal Özden

Data sets

Dst index World Data Center for Geomagnetism, Kyoto

Model code and software

Pyextremes George Bocharov

Deniz Güney Akkor and Halit Ünal Özden


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Short summary
Based on the fitted GEV distribution, EVT, the principles outlined by Weibull (1951), and POT technique, the likelihood of a geomagnetic storm similar to March 1989 occurring over the next 70 years was calculated to be between 7.14 % and 8.33 % (with 95 % confidence). Exposure determination associated with extreme weather events, such as geomagnetic storms, is based on estimating return periods using the probability and rate of exceedance of extreme events.