September 7, 2015
India’s top 10 cities have US$179.8 billion 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 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% of this economic growth is at risk from a combination of 18 man-made and natural threats. Catastrophes caused by natural events, such as extreme weather, pandemics and plant epidemics account for over half ($98.1 billion) of GDP at risk in the 10 cities.
Across the 10 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. 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%, market crash at 12.94% and flood at 12.89%. Globally, Mumbai has the largest GDP exposure to terrorism in the Index at almost $8 billion and the second highest exposure to power outage with $1.92 billion of GDP at risk.
The Lloyd’s City Risk Index presents the first-ever analysis of economic output at risk (GDP@Risk) in 301 major cities from 18 manmade and natural threats over a 10-year period. 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 major 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.