More than half of the world's population lives in an urban center. By 2050, an estimated two-thirds of human beings will reside in metropolitan areas. That's according to a new study from Lloyd's of London, in association with Urban Foresight and Newcastle University, that looks at the top risks facing cities today and what local authorities and insurers can do to mitigate future threats.

The "Cities at risk — Building a resilient future for the world's urban centres" report, which was commissioned before COVID-19, found several trends shaping today's cities, including:

• Climate change: Urban cities will become increasingly susceptible to extreme weather events that will grow in frequency and severity, says Lloyd's. Cities also contribute heavily to climate change, as they produce a large portion of the earth's carbon dioxide emissions.
• Growing middle class: Developing countries are seeing a growing middle class, which present unique challenges and opportunities. In many places, citizens are losing trust in their government, media and large corporations, resulting in demonstrations and protests.

The Lloyd's report also names four future threats facing urban cities based on the Cambridge Centre for Risk Studies' framework. These risks include:

• Geopolitics and society: Political tensions are rising worldwide, such as recent protests against police violence in the U.S. and Nigeria. These have deterred long-term investments, says Lloyd's.
• Natural catastrophe and climate: The U.S. recently experienced its record 11th named storm to make landfall in a single year. As countries' populations move more towards urban centers, the cities and residents will fave more vulnerabilities and losses related to weather events.
• Technology and space: Smart technologies and the Internet of Things (IoT) that carry vast amounts of data are becoming more at risk. According to Lloyd's, a catastrophic event, such as space weather that knocks out satellite communications or disrupts information flow, could "threaten essential infrastructure on which cities rely."
• Finance, economics and trade: Cities can lose the most GDP through financial risks, including market crashes, commodity price shock, and sovereign default.

Lloyd's selected seven cities that can demonstrate global issues. Click through the slideshow to see the seven cities in Lloyd's case study and the top threats facing their regions.

The role insurance plays

Insurers and reinsurers play an essential role in helping cities manage and transfer risks. Coverage options, such as specialty policies to protect against political risks, natural catastrophes and cyber risks, are just one step municipalities should take. However, Lloyd's asserts that cities, in general, are underinsured for reasons such as knowledge gap, cultural gap, or lack of communication. But, insurers could be leaving business on the table if they are not pursuing partnerships with cities. A few ways to do this include sharing data and analytics, assisting cities with risk preparation and mitigation practices, and improving cross-sector learning between public and private companies.