Canadian Underwriter

Man-made risks pose greater threat to cities than natural disasters: Lloyd’s


June 6, 2018   by Staff


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Copyright: 123RF.com / bluebayA new report from Lloyd’s finds that man-made risks such as market crashes, interstate conflicts and cyber crime pose a greater threat to cities than natural disasters.

The Lloyd’s City Risk Index, built in collaboration with Cambridge University, studied the impact of 22 threats on the projected economic output of 279 cities—representing a combined gross domestic product (GDP) of $35.4 trillion—around the world.

It found that the cities risk losing a combined average of $546.5 billion annually in economic output from both man-made risks and natural catastrophes. Man-made risks accounted for $320.1 billion and natural catastrophes accounted for $226.4 billion.

A financial market crash was identified as the biggest threat to the global economy, with the potential to cost an average of $103.3 billion per year. That was followed by interstate conflict at $80 billion per year.

Climate-related risks cost an average of $123 billion per year, with windstorms accounting for $66.3 billion and floods accounting for $42.9 billion.

“No city will ever be completely risk free,” Lloyd’s chairman Bruce Carnegie-Brown said in a news release. “Disruptions will always occur, whether it is the result of a hurricane or a cyber-attack. We have created this unique index to help cities around the world identify, understand and quantify their exposure to risk, which will help them prioritize investments and build resilience.”

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This story was originally published by Canadian Insurance Top Broker.