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EMERGING RISKS & URBAN RESILIENCE Guy-Antoine de la Rochefoucauld, Lloyd’s

© Lloyd’s

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Insuring cities

San Francisco, 1906

Thai Floods, 2011

Superstorm Sandy, 2012

“17 countries have an annual insurance gap of at least $168 billion”

Lloyd’s insuring cities © Lloyd’s

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What is an emerging risk?

► An emerging risk is characterised by: –

High uncertainty

High impact

Emerging factors (likely to generate disproportionate or unpredictable effects)

► This diagram illustrates a range of emerging risks. –

We measure them according to ‘uncertainty’.

© Lloyd’s

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Cyber risk

► Managing cyber risk will require great planning

and forward-thinking. ► The key challenge is to understand ‘systemic’

exposure – cyber is a networked environment ► Insurers are developing new products to

transfer the risk of liability and damage arising from cyber events. ► Cyber risk is covered by specialist policies.

© Lloyd’s

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Space Weather

► Space weather is driven by solar activity. It has

the potential to generate harmful effects on earth and against orbiting satellites (eg GPS).

► Space weather can affect electrical power,

telecommunications, transport, drilling and finance.

► Power grids and communications networks

should be resilient to extreme space weather

Bands of magnetic latitude: relative risk from extreme space weather (Source: Applied © Lloyd’s Environmental Research Inc.)

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Climate Change

► Scientific evidence points conclusively to

human-induced climate change

US Government National Climate Assessment, 2014

► Insurers have a critical interest in understanding

and managing the impacts of climate change.

► Lloyd’s research suggested that climate change

induced sea level rise increased the losses from Superstorm Sandy by 30% in New York. © Lloyd’s

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Conclusions

► More people live in cities ► Cities are vulnerable to many risks and

these include climate change, space weather or even cyber risk. ► All these risks could potentially lead to

systemic failures which impact financial markets, emergency services and even transport. ► Lloyd’s strives to be at the forefront of

understanding these risks. ► Insurance can help in managing those

risks.

© Lloyd’s

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© Lloyd’s

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