Tokyo second-riskiest city in the world for disasters, Lloyd’s of London says


Staff Writer

As Japan this week dealt with a trifecta of natural phenomena — flood, earthquake and volcano — a recent survey has found that Tokyo’s high exposure to man-made and natural threats makes it the world’s second-riskiest city to live in after Taipei.

In a recent report, the Lloyd’s international insurance market says the likelihood of events occurring over the next 10 years means Tokyo risks a possible economic loss of $153.28 billion of its GDP.

The report, Lloyd’s City Risk Index 2015-2025, was developed with Cambridge University’s Center for Risk Studies to help governments and businesses highly exposed to catastrophic shocks better prepare.

It says that a “combination of high economic value and large potential economic losses from both natural and man-made threats” contributes to its high rank and makes it among “the most financially exposed in absolute terms.”

However, London-based Lloyd’s said that Tokyo’s exposure to potential loss is comparatively low and accounts for only 10.44 percent of its $1.47 trillion in estimated annual GDP, making it “one of the richest cities.”

The report puts Taipei at the top of the list, with the risk of suffering economic damage of $181.2 billion in the next 10 years. Seoul was third at $103.5 billion, followed by Manila at $101.09 billion and New York at $90.36 billion.

The total GDP risk for all 301 cities analyzed was estimated at $4.56 trillion.

“My hope is that this unique index can stimulate discussion — and, where appropriate, prompt innovation,” Lloyd’s CEO Inga Beale said.

Tokyo was selected from 5,000 cities with populations over 250,000 and with economic significance to global GDP.

Lloyd’s analyzed a risk assessment of 18 catastrophe threats with the potential to cause damage and disruption to social and economic systems and their impact on economic output based on records of natural and man-made catastrophes over the past 50 years.

The threats analyzed included an earthquake, flooding, human pandemic, volcano, tsunami and drought as well as a stock market crash, oil price shock, cyberattack, nuclear accident and terrorism.

According to Lloyd’s, Tokyo ranked second for volcanic eruption risk, third for heat wave, fourth for wind storms, referring to typhoons, and sixth for earthquakes.

Lloyd’s reported that natural threats make up the majority of its potential losses. According to researchers, an exposure to wind storms may bring Tokyo a loss of $29.06 billion, while exposure to earthquakes and flooding may trigger a loss of $18.83 billion and $17.65 billion.

Within Japan, the survey cited 13 cities, including Osaka, Nagoya, Yokohama, Sendai, Hiroshima and Kyoto.

Osaka ranked second in Japan and eighth in the world with a GDP loss risk of $79.32 billion, with wind storms the main risk factor at $18.45 billion.

Both Tokyo and Osaka were cited as examples of a combination of high economic value and high exposure to both natural catastrophes and man-made risks.

The Lloyd’s City Risk Index 2015-2025 can be found at .

  • Jeffrey

    And why is Taipei riskier than Tokyo? Why are Seoul and Manila in the top five?

    If you are going to post articles like this where one thing is compared to another, you need to explain the criteria for the rankings. Simply stating a combination of “natural and manmade” disasters doesn’t cut it.

    Seoul, I would assume is on the list thanks to having a dangerous and crazy neighbor as the threat to the city from natural disasters is relatively low. If that’s part of that calculation, N. Korea can already hit Tokyo with crude nuclear weapons. So I would put Tokyo at the top of the list since it is by far the most vulnerable to natural disaster.

    Why Taipei? They don’t have nearly as many earthquakes and little history of tsunami. Is their rating in part based on a potential military threat from PRC?

  • At Times Mistaken

    I still feel safer in Tokyo and its surroundings than anywhere else I’ve ever lived (and I don’t have much to lose in the way of financial worth anyway).

  • PinealGlandActivated

    KEYWORDS: Man Made Disasters

    US and China are having problems over who Taipei, or Taiwan for that matter, belongs to. This is why Taipei is number 1 on the risky list. Tokyo is number 2 for that very same reason. Although Taiwan is actually part of China, the Taiwanese
    gov’t favors US relations.

    The US has supplied billions to Taiwan for building its defense, because in the end, US wants to own Taiwan due to it’s location being strategic for US defense against China, N. Korea and any other threat in the area. This is why they are
    helping to build it’s defense, and of course China isn’t very happy
    about that and have made more than subtle threats that they will attack

    If China does attack Taiwan, US will undoubtedly step
    in. If the US steps in then guess where they will be stepping in from?
    Seeing as Japan hosts numerous US military bases, it would seem likely
    utilizing those forces in Japan would be beneficial… therefore China
    would need to eliminate the US presence in Japan to defeat Taiwan.

    Interestingly enough, that begins to make sense in regards to why
    Abe is set on changing laws to allow Japanese forces to assist as allied
    forces with the US, after such a long peace keeping policy.

  • wrle

    Taipei, Tokyo and Seoul. Ironically they are also ranked among the top major cities for safety and low crime rates. You are probably more likely to get mugged or murdered in the city that compiled this list, London.

  • Rockne O’Bannon

    Did anybody posting read the article, or did they just read the headline?

    ““combination of high economic value and large potential economic losses from both natural and man-made threats” contributes to its high rank ”

    So here is the deal. Tokyo tops the list because it is a VALUABLE area with a lot of real estate in vulnerable areas. Sorry. Seoul and Taipei being safer or not safer probably has little to do with it. They just are not as important/valuable as Tokyo, get it?

    The fact that 13 Japanese cities made the list is surprising. With the low yen, one would think that a Typhoon hitting Hiroshima is not going to break anyone’s bank.

    Lloyd’s is an insurer, and they will make big bucks insuring buildings in Tokyo because the likelihood of something happening is very low. But if something DOES happen, Lloyd’s has to pay up. Last time i checked, Lloyd’s has UNLIMITED LIABILITY, so there is risk and reward there. Lloyd’s quantifies that risk according to its models with different projected losses from various catastrophes that are expected with a certain probability, and they come out with this list and some vague comments about risk.

    The list does not surprise me. And the fact that people do not understand RISK does not surprise me either. Can I find anyone who thinks of nuclear power as low risk? No. I didn’t think so. After 3.11, a lot of companies went into Fukushima selling cancer insurance. They made out like bandits.

    Come to think of it, anybody wanna buy some insurance?