Munich-Re*
Megacities: Growing loss potentials?

Although there was a distinct increase in the number of natural catastrophes recorded throughout the world in the year 2000, the economic losses and insured losses were relatively low. One reason for this is that fewer densely populated regions and fewer urban areas were affected. The loss figures of past years clearly show that “direct hits” in towns and cities, conurba-tions, and particularly mega-cities always generate excep-tionally large losses. This applies both to earthquakes and to windstorms and floods. Basides these main catastro-phes, there are other natural events that can have very catastrophic effects, particu-larly heat waves -as in Athens in 1987 or in Chicago in 1995-, which are often capable of literally paralysing public life altogether. But hail, snow, frost, and freezes have dire effects too, as in Munich in 1984, in New York City in 1996, and Montreal and Toronto in 1998. Supplying the population and providing assistance during and after natural catastrophes in particularly difficult in conurbations, where chaos frequently reigns immediately after such events and the infrastructure is badly hit. Often, evacuating those affected and taking care of them cannot be carried out fast enough.

Developments in urban cantres

The degree of urbanization in the world is continually rising. The population statistics reveal some interesting trends:

• Half of the world´s total population now live in urban areas and the drift from the land into the cities is unbroken above all in the Third World.
• The number of cities with more than one million inhabitants has increased by a factor of over four in the past 50 years (1950: 80, 2000: 371), in the Third World by a factor of almost six (1950: 34, 2000: 260).
• Megacities (defined by the United Nations as cities with more than ten million inhabitants) have even increased by a factor of twenty (1950: 1, 2000: 20). In 1950 four of the 15 largest cities in the world were in the Third World, in 2015 it will probably be twelve.

Everywhere in the world huge conglomerations are developing at breathtaking speed, often in areas that are highly exposed to catastrophes. Slowly but surely more and more targets for natural events are growing up, some of them with gigantic concentrations of people and values. Especially conurbations in the poorer countries display a particularly high level of vulnerability. Megacities are ticking time bombs, because the provision of supplies and protective measures are particularly difficult in urban centres on account of the complex and sometimes bewildering structures. Even if the number of extreme events remains more or less constant in the future, it is inevitable that natural catastrophes will increase both in number and in size.

Source: Munich-Re Topics 2000, Grupo Munich-RE

For more information contact:
Dr. Gerhard Berz, Thomas Loster or Angelika Wirtz
Tel. (49089)302-02911
Fax (49089)3891-5696
www.munichre.com

Some major natural catastrophes in large cities and conurbations