High-rise buildings are seen in the Shinjuku business district during sunset in Tokyo. Photo: REUTERS/Toru Hanai
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Tokyo is world city facing greatest risks: Lloyd's index

29 Comments

Tokyo is the global city facing most risks to its annual economic output, due to its proximity to North Korea, according to an index compiled by the Lloyd's of London insurance market.

New York ranks second in the risk index at nearly $15 billion in annual GDP at risk, with a possible stock market crash its biggest threat.

Potential threats include everything from rare events, such as earthquakes, to more frequent concerns, such as cyber attacks.

The 279 cities in the Lloyd's City Risk Index have a combined gross domestic product of $35 trillion and risk losing$547 billion in economic output annually as a result of 22 threats ranging from interstate conflicts to tropical storms, the index showed on Wednesday.

More than $24 billion annually in gross domestic product is at risk in Tokyo, with interstate conflict the city's biggest threat.

Tokyo's ranking "reflects the much greater risks around North Korea", said Bruce Carnegie-Brown, chairman of Lloyd's. "Tokyo also has relatively poor resilience to interstate conflict because of its underinvestment in defense capabilities."

A stock market crash is the costliest threat to gross domestic product for New York and some other U.S. cities, including Chicago and San Francisco, as well as Toronto, Montreal and Vancouver in Canada.

However, flooding poses the costliest threat, collectively, across cities in the U.S. and Canada.

North American cities feature highly in the global ranking, in part, because a strong economy in the region means there is more to lose, Lloyd's said. An earthquake is the costliest threat for Los Angeles, Lloyd's said.

Third-placed Manila has over $13 billion at risk, with tropical windstorm top of its risks.

London has more than $8 billion at risk, placing it ninth in the index, with a market crash also its biggest threat.

"Investing in resilience – from physical flood defences to digital firewalls and enhanced cyber security, combined with insurance – will help significantly reduce the impact of extreme events on cities, improve economic stability and enhance prosperity for all," Carnegie-Brown said.

© (c) Copyright Thomson Reuters 2018.

©2018 GPlusMedia Inc.

29 Comments
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Tokyo also has relatively poor resilience to interstate conflict because of its underinvestment in defense capabilities."

Cripes, is this a push to militarize even more? "Defense" is under the control of the national government here and not Tokyo alone. Japan has like the 5th largest defense budget in the world!

10 ( +12 / -2 )

Amazing how this report comes out now just at the same time that there is a big push to change the constitution and allow for the re-militarization of Japan! How about Seoul, aren't they a little closer to North Korea? Beijing? Why Tokyo? None of the large European cities are not vulnerable to terrorism or some other event. Just my two cents.

8 ( +12 / -4 )

I'm not losing sleep over any of this.

9 ( +11 / -2 )

Agree with the above two comments. There was also that oddly timed story about Britain's anger regarding Japan's lack of contribution to the first Gulf War the other day; there's definitely some manipulation of news stories going on.

Tokyo is vulnerable because of the possibility of a strong earthquake and the overconcentration of people and resources in one small part of the country.

11 ( +13 / -2 )

Huh. Weird how there's this vibrant, thriving city with a metropolitan population of over 25 million that has been within range of North Korea's conventional weapons for decades, and yet they don't get a mention here. Is it because somehow Seoul is magically less possible to attack than Tokyo, or is it more because the people of Seoul understand how the Kim regime operates and don't fall to pieces every time he uses threatening bluster to get concessions out of people?

8 ( +10 / -2 )

Wonder who commissioned this report? Also with so much of Japan being Tokyo-centric, 24 billiion dollars does not seem so much. Tokyo's GDP alone in 2013 was 929 billion dollars, according to government statistics on their website.

5 ( +7 / -2 )

No, North Korea is not the biggest threat to Tokyo. The biggest threats are the fossils in the government and running Japan’s large companies, who think it’s still 1985.

15 ( +17 / -2 )

Tokyo should worry more about Earthquakes and tsunamis than NK.

12 ( +13 / -1 )

The biggest threats are the fossils in the government... 

That's nothing compared to the "fossils" in the corporate boardrooms whose staff are routinely fabricating quality-control data and jimming safety standards for the nation's most strategic products and materials.

11 ( +12 / -1 )

How about the polluted air from millions of vehicles and radiation from Fukushima?

Or the extreme summer temperatures caused by lack of air flow and masses of blacktop?

How about being squeezed into trains everyday?

Tokyo sure has its problems but North Korea?

Who comes up with this tripe?

4 ( +8 / -4 )

Who comes up with this tripe?

Insurance salesmen.

https://cityriskindex.lloyds.com/

7 ( +8 / -1 )

North Korea as the primary risk facing Japan? Seriously?

I would love to see the risk assessment and how they came to this conclusion. It would seem to me that a more credible assessment would identify a major earthquake or a bursting of the current economic bubble as being the primary risks facing Tokyo.

6 ( +7 / -1 )

But you see, if we claim that North Korea is the biggest threat, then one way to counter that is to change the constitution and re-arm yourself. This plays right into Shinzo's game plan. We all know that basically nothing can be done about earthquakes or if Mt. Fuji erupts. Tokyo_Engr, I agree with you, Lloyds is supposed to be adept at surveying and judging risk, but they have really shot themselves in the foot with this one.

4 ( +4 / -0 )

North Korea? But next week Trump and Kim will meet, and we'll all be great friends. This report is already dated.

0 ( +3 / -3 )

I think critics of this report may be confusing probability with risk. Yes Seoul may have a similar, maybe even a greater, chance of being hit by NK. But they risk much less. Remember this report focuses on economic risk. And Tokyo would suffer greater economic loss if attacked. That is what the insurance people are gauging.

3 ( +5 / -2 )

inkjet - Good point about risk but I disagree with your comment about Seoul 'risking much less* Seoul is the capital of a developed country and has 10 million people, Tokyo has 13 million though a larger hinterland.

Taking the simple equation risk equals economic loss X probability, then the risks factors for Tokyo and Seoul may not be so different regarding war.

1 ( +1 / -0 )

There’s a big ocean in there between NK and Tokyo- not so for Seoul.

1 ( +2 / -1 )

This is report reflects being compiled 6-12months ago. Not relevant anymore.

1 ( +2 / -1 )

Biggest threat is the LDP. Miscalculation me thinks.

-2 ( +0 / -2 )

@MarkX

How about Seoul, aren't they a little closer to North Korea?

Kim Jong Un doesn't want to nuke his future capital when he unifies the ROK under the communist flag. But Kim has no remorse about nuking Tokyo.

@katsu78

 Is it because somehow Seoul is magically less possible to attack than Tokyo

Seoul is under the protection of the KAMD, the triple layer Korean indigenous missile defense system that cost in excess of $25 billion with more than one thousand interceptors. Shockingly, Koreans are pretty much self-reliant as far as ballistic missile defense is concerned.

Tokyo is not under the protection of anything other than PAC-3 that act as the last resort defense. Japan's trying to add Aegis Ashore on top of that to create a two-layer defense, but the Aegis Ashore has so few interceptors that it's easy to defeat it via a saturation attack, that is launching more ballistic missiles than Japan got SM-3 interceptors to shoot them down.

-3 ( +1 / -4 )

Everybody agrees, M9.8, 25m tsunami, bad govt, decayed infrastructure, but fujisan will close all airports, stop the train system, kill thousands with more missing...

-1 ( +1 / -2 )

‘Seoul is the capital of a developed country and has 10 million people, Tokyo has 13 million though a larger hinterland.’

The relative effect may be greater for Korea if Seoul was destroyed, I have no proof either way. But the insurers aren’t gauging relative damage. They are gauging straight economic losses. What would an insurer have to pay out to compensate for damage?

I’ve been to Seoul and Tokyo. I’d rather pick up the tab on Seoul. Tokyo is in another league economically.

0 ( +0 / -0 )

Japan/Tokyo should worry about the next megaquake coming its way than the media-hyped NK bogeyman threat.

-1 ( +0 / -1 )

Goodlucktoyou - I've pointed out to you a number of times that no models of the next Great Kanto Earthquake (or other similar earthquakes, e.g. Nankai) have ever predicted a tsunami of more than a meter or two for Tokyo Bay because of its shallowness and the sheltering effect of the Boso and Miura peninsulas.

There has also NEVER BEEN an earthquake with a magnitude of M9.8 (try putting "largest earthquake" into Google).

Making hysterical doom-laden predictions without any knowledge of the subject is unhelpful, so please stop.

1 ( +1 / -0 )

Any big disaster will be far outweighed by the lack of preparedness and simple wishfull thinking of the government in doing what it calls "preparation". Look what a wee little snowstorm does the city!

0 ( +1 / -1 )

We haven't had a big one in Tokyo for ages, even 3/11 wasn't that big here. But thinking about it won't change anything nor help one bit.

0 ( +0 / -0 )

‘Japan/Tokyo should worry about the next megaquake coming its way than the media-hyped NK bogeyman threat.’

I’m sure the insurance company has included natural disasters into the equation. I haven’t read the report but I would bet the NK threat is just one part of the whole appraisal.

I imagine the insurer is most concerned about the NK threat because of the scale and the recovery time. Cleaning up after an earthquake would be small potatoes in comparison. If NK were to use its bombs (small probability) the resulting damage would be off the scales (high risk). They are talking about the risk level, not the probability level. At the end of the day the insurer needs to cover for all posabilities. Especially the very, very expensive ones.

I imagine as a result of this report we will see more policies written to exclude acts of war.

0 ( +0 / -0 )

BS index

0 ( +0 / -0 )

The capital of Japan was to be moved to Sendai but after that earthquake+tsunami of 2013 no more notice or any news of that, it is all stagnated to be center of the country, that megatown of at least, at most TOKYO!

0 ( +0 / -0 )

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