The insurance industry since 1906 has seen and paid out its share of claims from catastrophic losses, but we fortunately have not yet experienced an insured-loss event greater than about $40 billion.

So imagine for a moment what kind of cataclysm would be required to top $1 trillion in total damage. Catastrophe modelers Arnaud Mignan, Patricia Grossi and Robert Muir-Wood at Newark, Calif.-based Risk Management Solutions have, and the risk, while rare, is quite sobering.

RMS recently published a study on the 1908 Tunguska explosion that devastated a remote area of Siberia. Scientists now believe that a comet or asteroid exploded several miles above the Tunguska River basin, leveling trees in an area of more than 700 square miles. Witnesses reporting seeing “a great fireball, bright as the sun.” The energy of the blast has been calculated as the equivalent of 10 megatons of dynamite, or about 1,000 times the force of the atomic bomb dropped on Hiroshima, Japan, in 1945. Fortunately, fatalities from the 1908 event were low as the blast area was sparsely populated.

Now imagine such a cosmic event occurring in a heavily populated area such as New York City. As one might expect, a Tunguska-type event centered over the Big Apple would be utterly devastating to people and property. RMS estimates that such a catastrophe would claim 3.2 million lives, injure 3.76 million more and cause more than $1.1 trillion in property losses. What that size loss would do to the insurance industry is pretty clear: never mind harden rates, it would virtually wipe out the global property/casualty industry.

The good news, if any, is that while asteroids and meteorites do impact Earth and occasionally damage populated areas, events of the Tunguska magnitude are rare. While historical data is lacking, particularly where comets or asteroids impacting Earth left no visible trace, RMS estimates a Tunguska type blast occurs once every 1,000 years.

I for one hope that Earth is spared, as managing risks from comets or asteroids is awfully difficult.