<div><em>Lloyd’s City Risk Index 2015-2025 presents the first ever analysis of economic output at risk (GDP at risk) in 301 major cities over a ten-year period</em></div><div> </div><div> </div><div>While natural catastrophes such as extreme weather, pandemics and plant epidemics are going to put $98.1 billion of GDP at risk in ten Indian cities, manmade risks will account another $81.7 billion loss in the next decade, says a new study - the Lloyd’s City Risk Index.</div><div> </div><div>In total India’s ten largest centres of economic growth have $179.8 billion of GDP at risk from a series of threats over the next decade, according to new research for Lloyd’s, the specialist insurance market. The Lloyd’s City Risk Index, presents the first ever analysis of economic output at risk (GDP at risk) in 301 major cities from 18 manmade and natural threats over a ten-year period.</div><div> </div><div>Across the ten cities combined, the largest economic exposure is to pandemic risk, which could put $39.65 billion of GDP at risk, followed by flood at $33.84 billion, market crash at $21.13 billion, oil price spike at $20.81 billion and terrorism at $16.07 billion. The immense density of populations in urban areas, large numbers of people commuting and access to health services are significant contributing factors in the vulnerability to a pandemic. </div><div> </div><div>In India, the Index found the cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kanpur, Kolkata, Mumbai, Pune and Surat together will generate an average annual GDP of $1.4 trillion in the coming decade. However, 12.6 per cent of this economic growth is at risk from the combination of 18 manmade and natural threats.</div><div> </div><div>Based on original research by the Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School, the Index finds that a total of $4.6 trillion of projected GDP is at risk from manmade and natural disasters in these cities around the world. Lloyd’s has produced this Index to help increase the understanding of, and shape the world’s response to, the shifting risk landscape. The Index, which will be updated every two years, is aimed at stimulating further discussions between insurers, governments and businesses on the need to improve resilience mitigate risk and protect infrastructure.</div><div> </div><div>Mumbai has the largest total GDP at risk with a $47.38 billion risk exposure. Almost one quarter of the city’s potential losses are related to pandemic risk, followed by terrorism at 16.77 per cent, market crash at 12.94 per cent and flood at 12.89 per cent. </div><div> </div><div>Globally, Mumbai has the largest GDP exposure to terrorism in the Index at almost $8bn and the second highest exposure to power outage with $1.92 billion of GDP at risk. </div><div> </div><div>Globally, the Index identifies three important emerging trends in the global risk landscape:</div><ul><li>Emerging economies will shoulder two-thirds of risk related financial losses as a result of their accelerating economic growth, with their cities often highly exposed to single natural catastrophes.</li><li>Manmade risks such as market crash, power outages and nuclear accidents are becoming increasingly significant, associated with almost half the total GDP at risk. A market crash is the greatest economic vulnerability – representing nearly a quarter of all cities’ potential losses.</li></ul><div> </div><div>New or emerging risks, such as cyber-attack, are also increasingly significant. Together, they account for more than a third of the total GDP at risk with just four – cyber-attack, human pandemic, plant epidemic and solar storm – representing more than a fifth of the total GDP at risk.</div><div> </div><div>The findings show the need for governments and businesses to work together to build more resilient infrastructure and institutions. How quickly a city recovers after a catastrophe is a key component of the total risk, and the impact of events is mitigated by rapid access to capital to help restore the economy.</div><div> </div><div>Vincent Vandendael, Director of Global Markets, Lloyd’s said: “Lloyd’s City Risk Index highlights the economic exposure of 301 major cities across the world. Governments and businesses, together with insurers, must work together to ensure that this exposure – and the potential for losses – is reduced. Insurers, governments, businesses and communities need to think about how they can improve the resilience of infrastructure and institutions. Insurance is part of the solution. Insurers must continue to innovate; ensure their products are relevant in this rapidly changing risk landscape, offer customers the protection they need and, as a result, contribute to a more resilient international community.”</div><div> </div><div> </div>
