Mumbai is world’s top potential terror destination: Lloyds
04 Sep 2015
Mumbai, India's financial capital, has the highest exposure to terrorism according to insurance giant Lloyd's.
The city that saw the horrific 26 November 2008 terrorist attacks that left 166 people dead, continues to have the largest exposure to terrorism, at almost 8 billion in GDP terms, according to the Lloyd's City Risk Index released on Thursday.
This is not all; and Mumbai's administrators had better bet on their toes. The index also states that the metropolis has the second highest exposure to power outages among the large global cities, with $1.92 billion of GDP at risk
The 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.
The survey says that India's 10 largest centres of economic growth have $179.8 billion of GDP at risk from a series of threats over the next decade.
Lloyd's explains, ''When a catastrophic event, such as an earthquake, a pandemic or a financial crisis, hits a city, it reduces its economic output. The loss of economic output, relative to the economic output that would have been expected, is the GDP at risk from an event.''
Mumbai has the largest risk with $47.38-billion worth of exposure and almost one quarter of the city's potential losses are related to pandemic risks, followed by terrorism at 16.77 per cent, market crash at 12.94 per cent and floods at 12.89 per cent.
The city risk index says Ahmedabad, Bangalore, Delhi, Chennai, Hyderabad, Kanpur, Kolkata, Mumbai, Pune and Surat together will generate an average annual GDP of USD 1.4 trillion in the coming decade.
Vincent Vandendael, director of global markets at 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 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.''
Lloyd's plans to enter the Indian market and expects some clarity from the regulator.
''Lloyd's has enjoyed a long history of providing specialist coverage for complex risks in India. As India's economy expands and new risks emerge, Lloyd's is looking to develop innovative solutions, which meet changing needs of business.
In principle, about half of total GDP at risk can be protected by improving aspects of infrastructure and crisis management, with insurance playing a key role in this process, '' said Arun Agarwal, Lloyd's general representative, India.
