Australians may perceive their biggest risks as coming from Mother Nature but an in-depth report from Lloyd’s has highlighted that key man-made risks outstrip natural catastrophe risks by a factor of three.
The Lloyd’s City Risk Index found that Australia’s six biggest cities had more than $114 billion of GDP at risk from manmade and natural disasters, with more than half of that total coming from the risk of a market crash.
The next most sizeable risk came in the former of cyber attacks, accounting for more than $20 billion, followed by a human pandemic ($13 billion).
Lloyd’s General Representative in Australia Chris MacKinnon says the findings show the need for governments and businesses to work together to build more resilient infrastructure and institutions.
“While in Australia we are all too aware of the perils bushfire, flood or storm, we should be increasingly aware of a number of emerging threats highlighted in the report,” he says.
“Solar storms, human or plant pandemic or cyber terrorism are emerging threats which need to be considered and whilst the insurance industry continues to innovate with specialist insurance and reinsurance coverage, government, business and communities must work together to create a more resilient response to a major event.
“Increasing insurance cover is an essential tool in mitigating risk and reducing the burden which often falls on governments and taxpayers to fill the gap.”
To view the full interactive report, click here.