The megacity state: The world's biggest cities shaping our future

There are already 29 megacities in the world and the number is growing fast. The concentration of inhabitants, buildings and infrastructures is rising exponentially as available space continues to shrink. Many of these cities are located in low-lying coastal regions, which are especially vulnerable to the effects of extreme weather and climate change. In this report, Allianz addresses the implications of these developments and describes the role of insurance in reducing flood risk.

Some of the recommendations proposed in the report to deal with flood risk in cities are storm water drainage and green roofs which reduce runoff and flood risk. In addition, the report explains that with resilience in mind, academics, politicians and business representatives have developed the vision of a Smart City. In this context, decentralised energy-generation and storage system can help mitigate the impact of power outages.

Furthermore, the necessary infrastructure requires secure support as the report states. The insurance industry’s role is to protect people, property and systems alike - regardless of their complexity and size. By pushing the boundaries of insurability, the (re)insurance business can make an effective contribution to the development of megacities. In this way, the insurance industry is a powerful tool to strengthen the resilience of local and national economies and societies at large.