Lloyd’s of London, the largest insurance marketplace in the world, cautions that Washington, D.C., carries $26.6 billion in risk over the next 10 years from a combination of manmade and natural threats.
The corporate body commissioned by Parliament cites a potential stock market crash, a plummeting of global petroleum prices, and cyber warfare as prime candidates to do the globally powerful city of 650,000 residents considerable harm.
The assessment is based on research conducted by the University of Cambridge, which is captured in the City Risk Index 2015-2025.”
The research measures potential damage to 301 metropolitan areas’ 10-year economic output, exploring the “potential impact of 18 catastrophic threats … [using] an innovative metric, GDP@Risk.”
New York and Los Angeles are most at risk, and carry more than $90 billion each of risk due to potential market crashes, oil price shocks, cyberattacks, flood and human pandemic. Earthquake risk alone contributes $18 billion worth of risk to Los Angeles.
Washington, D.C., has the sixth-highest risk among all U.S. cities, and all major U.S. cities added together carry more than $600 billion worth of risk.
“The findings show the need for governments and businesses to work together to build more resilient infrastructure and institutions,” the study said. “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.”
