The biggest risks facing Melbourne are an economic market crash or large cyber attack, according to a recent insurance industry report.
Flooding, human pandemic and solar storms round out the top five, according to the Cities at Risk index, published annually by insurance specialist Lloyds.
The report highlights the economic risk exposure of major cities around the world. Developed with the Cambridge University Centre for Risk Studies, the report found that Sydney has the biggest risk economic output (GDP at risk) of all Australian cities.
Melbourne was a close second with $22.98 billion of its $298.77 billion GDP at risk.
While natural disasters often take up the bulk of the risk worries, the report noted the rise of emerging threats such as cyber terrorism, human pandemic and solar storm need to be considered. Last year VMIA introduced a cyber-liability insurance product to address data security breaches and cyber-attacks.
Researchers said the findings showed the need for governments and businesses to work together to build more resilient infrastructure and institutions.
“How quickly a city recovers after a catastrophe is a key component of the total risk. 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,” the report states.
View the full Lloyd’s Cities report.