The rising number of global megacities will increase risks from natural catastrophes and other events, according to an Allianz Global Corporate & Specialty (AGCS) report.

By 2030 there are expected to be more than 40 cities with populations exceeding 10 million people, up from 29 today. In 1950 only Tokyo and New York topped the figure.

AGCS says earthquakes, cyclones and flooding pose the main natural catastrophe threats, particularly in newer Asian megacities where governments are grappling with rapid urbanisation.

The report says co-operation between the Thai Government and insurers after Bangkok floods in 2011 shows the benefit of a collaborative approach.

“Realistically, natural catastrophes will continue to be a major threat to Asian megacities,” it says.

“However, the experience accumulated over decades, the improved modelling capabilities and especially the successful collaboration between insurers and governments give reason for optimism.”

Terrorism, cyber threats and pandemics are other growing risks in megacities.

AGCS says formal information-sharing between insurers, reinsurers, brokers, authorities and insureds is required to tackle cyber threats, and to enable adequate pricing and best practices in underwriting and risk management.

“The threat of cyber attacks, and the mission to protect IT-dependent megacities, their citizens and business against it, is one of the greatest conundrums to be faced by the insurance industry and authorities alike,” it says.

“Proportionally, with the spread of the Internet of Things and global interconnectivity, the frequency and severity of cyber attacks have increased and will continue to do so.”

Pandemics could shut down business districts, while a growing upper and middle class may expect more compensation and potentially fines for pandemic-related damages.

“In future, technological advancement might bring some relief to insurers as well as authorities,” AGCS says. “For example, newly developed 3D printing techniques could offer solutions to swiftly build mass housing facilities in times of crisis, moving citizens out of infested areas.”