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

Akkor, Deniz Güney; Özden, Halit Ünal

doi:https://doi.org/10.5194/egusphere-2023-1800

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https://doi.org/10.5194/egusphere-2023-1800

Preprints

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.

Received: 07 Aug 2023 – Discussion started: 15 Sep 2023

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Deniz Güney Akkor and Halit Ünal Özden

Status: open (until 29 Oct 2023)

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RC1:
'Comment on egusphere-2023-1800', Anonymous Referee #1, 24 Sep 2023 reply

See attached pdf.

Reply

Citation: https://doi.org/10.5194/egusphere-2023-1800-RC1
- AC1:
  'Reply on RC1', Deniz Güney Akkor, 25 Sep 2023 reply
  
  Dear Referee,
  We would like to express our gratitude for your comprehensive review of our manuscript. Your expert input is invaluable, and we appreciate the time you've dedicated to evaluating our work. We've made it our priority to address all the concerns and suggestions you've raised.
  We've taken steps to clarify the scope and limitations of our study, giving particular attention to the statistical methods and their applicability in the context of the data available. We also acknowledge your point on the lack of economic analysis; however, the focus of our current research is strictly on applying statistical data science methods to existing, concrete scientific data. In doing so, we believe our study meets the scientific requirements for such an application and the subsequent interpretation of the results.
  We've endeavored to provide a more precise explanation for the return period related to the March 1989 event, emphasizing the EVT's value in answering questions about events that may not be present in the existing data records. We have taken note of your suggestion to be cautious in interpreting results that extend beyond the limitations of our dataset, and we intend to focus on this aspect in our future research.
  Concerning the incorrect and incomplete references, we sincerely regret these oversights and assure you they will be rectified. We are also in agreement to update the tables and figure labels according to the journal's standards.
  We have consulted pioneering studies in this field such as Rogers et al. (2021) and Chapman et al. (2020) prior to the conception of this work. However, we found that a constant index like Dst was a better fit for our modeling needs. This study is aligned with the existing literature and contributes to ongoing debates in the space weather science community, especially those related to events most likely to occur within our lifetimes.
  Lastly, we are eagerly awaiting the updated RAE report by Cannon et al., as it promises to provide additional context and relevance for our work.
  If our responses to your concerns are found to be satisfactory, we would like to proceed with the necessary revisions to improve the quality of the manuscript for re-submission. Thank you again for your valuable feedback, and we look forward to your response.
  Best regards,
  D. Güney Akkor
  
  Reply
  
  Citation: https://doi.org/10.5194/egusphere-2023-1800-AC1
  - RC2: 'Reply on AC1', Anonymous Referee #1, 29 Sep 2023 reply
    
    This paper might be worth referencing as well:
    
    Bergin, A., Chapman, S. C., Watkins, N. W., Moloney, N. R., & Gjerloev, J. W. (2023). Extreme event statistics in Dst, SYM-H, and SMR geomagnetic indices. Space Weather, 21, e2022SW003304. https://doi.org/10.1029/2022SW003304
    
    Reply
    
    Citation: https://doi.org/10.5194/egusphere-2023-1800-RC2
    
    AC2: 'Reply on RC2', Deniz Güney Akkor, 29 Sep 2023 reply
    
    Dear Referee,
    We express our gratitude for dedicating your time to reviewing our manuscript and providing us with your valuable feedback. We acknowledge and value your recommendation to cite the aforementioned scholarly article.
    Bergin, A., Chapman, S. C., Watkins, N. W., Moloney, N. R., and Gjerloev, J. W. (2023). This study focuses on the statistical analysis of extreme events in three geomagnetic indices, namely Dst, SYM-H, and SMR. The article titled "Space Weather, 21, e2022SW003304" can be accessed at the following DOI: https://doi.org/10.1029/2022SW003304.
    After conducting a thorough examination of the aforementioned paper, we concur that it provides valuable insights that are pertinent to our research. The reference will be integrated into our revised manuscript, and its findings will be thoroughly examined and discussed within the framework of our research.
    We express our gratitude for your meticulous focus on detail and constructive suggestions, which enhance the quality of our work.
    We have updated our responses to your initial comments in the attached PDF (those highlighted in green are new additions based on your feedback, which we will incorporate into our draft and share a follow-up version with you if you find our responses reasonable, those highlighted in yellow are still open for comment, and those highlighted in red have not yet been made by us).
    We look forward to receiving your feedback.
    Best regards,
    D. Güney Akkor
    
    Reply
    
    Citation: https://doi.org/10.5194/egusphere-2023-1800-AC2

Deniz Güney Akkor and Halit Ünal Özden

Data sets

Dst index World Data Center for Geomagnetism, Kyoto http://wdc.kugi.kyoto-u.ac.jp/

Model code and software

Pyextremes George Bocharov https://georgebv.github.io/pyextremes/

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.


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