June 6, 2018 by Staff
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.