Megacities - pushing the boundaries of our industry: Risk trends and insurance challenges

This Allianz Global Corporate & Specialty (AGCS) report examines how natural catastrophe, pandemic outbreak, terrorism and cyber risk could potentially affect megacities in future and provides insight into the different ways in which the insurance industry will be impacted.

This paper demonstrates that (p. 16):

• in the context of today’s and tomorrow’s megacity, where the risk landscape is considerably different and constantly evolving in terms of quantity and quality, it is time to revisit the sharing concept with regards to risk insurance;
• for Natural Catastrophes (NatCat), Public-Private Partnerships (PPP)-like risk sharing between the insurance market and the government has been most efficient and effective to overcome the Thai flood disaster;
• sharing on a different, advanced level, i.e. the level of data and analytics, is also helpful for dealing with NatCat and pandemics;
• just as megacities will require their citizens to co-exist with greater reliance upon each other in a diverse, ever-changing environment, so must the insurance industry begin to pool its resources and share with other stakeholders, i.e. authorities and insureds, to develop solutions for the future.