Global risk data reveals cities most vulnerable to climate disasters

Guidewire HazardHub provides insurers access to more than 1,000 data points and over 50 peril scores for every address in the U.S., as well as 65 granular data elements and four peril risk scores — wildfire, flood, wind and hail — across more than 20 countries in Europe, Australia, New Zealand and South Africa. This global reach allows a better understanding of how those cities are vulnerable to extreme weather and events. For instance, we see that in Sydney and Cape Town, suburban expansion and drought conditions have pushed wildfire risk to the urban edge. We also see that flood-prone cities like Amsterdam, Vancouver and Miami face risks from rising seas and storm surge as well as aging drainage systems. Meanwhile, metropolitan centers such as Tokyo, Manila, Jakarta and Mexico City confront a combination of typhoon risk, seismic vulnerability, and dense urban development.

Even cities that may not dominate global headlines contend with climate and extreme weather risks. Consider Lisbon, Naples and Christchurch, where a mix of wildfire and coastal flooding, in concert with seismic activity, present significant risks that demand attention.

Numerous agencies including the National Oceanic and Atmospheric Association (NOAA), the U.S. Environmental Protection Agency (EPA), the World Meteorological Organization (WMO), and the Intergovermental Panel on Climate Change (IPCC) all warn that global warming is driving more intense storms and extreme weather. It follows that next-generation risk models and data have become essential to the insurance business. The ability to assess and act on hazard data is central to effective risk assessment, management and mitigation.

Global wildfire risk

In Europe, Athens, Barcelona, Lisbon and Naples stand out in terms of wildfire risk.

In Australia, the areas around Sydney, Melbourne and Canberra are prone to bushfires.

Queenstown, New Zealand saw a record high number of extreme fire danger days last year, and in Cape Town, South Africa, that risk was highlighted by the 2024 Western Cape wildfires.

The 2023–2024 fire season saw 3.9 million square kilometers (or more than 2.million square miles) burned globally. That year saw one of the worst wildfire years in a century in Europe, scorching more than 500,000 hectares (or 1,930 square miles) and causing an estimated €4.1 billion in damages (or about $4.66 billion) with heavy losses in Greece, Spain and Italy.

The 2023 season in the U.S. burned approximately 2.7 million acres (or about 1.1 million hectares), resulting in $10.4 billion in insurance losses. This year, the wildfires in Los Angeles marked one of the costliest wildfire disasters in modern U.S. history.

In the U.S., few climate threats have become as emblematic as wildfire. When ranked by the percentage of homes receiving an “F” wildfire risk rating, the top five states:

1. Nevada;
2. Oregon;
3. California;
4. Idaho (4th); and
5. Wyoming.

But in terms of sheer numbers, California far outpaces others, with 1.03 million homes at high wildfire risk.

Modern wildfire risk models have evolved dramatically from their early iterations. Today, risk models can incorporate many more data elements, including updated satellite vegetation data, slope and aspect, historical burn footprints, and proximity to firefighting resources to paint a more accurate picture of fire vulnerability.

Basic wildfire mitigation measures for a home, such as creating defensible space and installing fire-resistant roofing, can reduce wildfire risk by roughly 20%, according to a HazardHub analysis. Comprehensive mitigation efforts can cut risk by as much as 70%.

Global flood risk

Another major peril examined in the Financial Times article was flood risk. Several European cities are notably vulnerable to flooding including Hamburg, Paris, London, and of course, Venice. Beyond Europe, cities like Bangkok, Jakarta and Shanghai would make a list of the global cities most vulnerable to flooding.

Europe experienced nearly $5 billion in insured losses from floods in 2023. In the U.S., insured losses climbed 36% to $112.7 billion in 2024, with the lion’s share due to inland and coastal flooding driven by Hurricanes Helene and Milton. Flooding remains the most costly natural hazard in the U.S. In terms of cities, three locales stand out for both the intensity and frequency of their constant flood exposure: New Orleans, Miami and Houston.

In New Orleans, 94% of housing units are rated as very high risk for flooding. The city sits below sea level, protected by levees and pumps that are aging and increasingly stressed. The memory of Hurricane Katrina in 2005 remains vivid; more than 110,000 homes were inundated when the city's levees failed.

Meanwhile, Miami faces both hurricane surge and chronic tidal flooding. With 35% of its homes rated high or very high risk for flooding, the city’s flat elevation and porous limestone geology limit the effectiveness of seawalls and flood barriers.

Houston presents a different case: Its sprawling development and flat terrain leave it vulnerable to flash flooding. Hurricane Harvey in 2017 exposed these weaknesses, dumping more than 40 inches of rain in four days and flooding vast sections of the city.

Advances in the availability and granularity of property-level risk data are reshaping how insurers assess flood exposure and are driving growth in the private flood insurance market. Since 2016, private flood policies have increased by 24%, with direct written premiums rising from $3.3 billion to over $4 billion, according to the Insurance Information Institute. Although private insurers still account for just 3.5% to 4.5% of the residential flood market, their share is gradually expanding as technology enables more precise risk evaluation and tailored underwriting.

The storm surge threat

Tropical cyclones go by different names — typhoons in the Northwest Pacific, cyclones in the South Pacific and Indian Ocean, and hurricanes in the North Atlantic and Northeast Pacific. While countries such as the Philippines, Japan and India experience some of the most frequent and intense storms, the Atlantic basin — including the U.S., Gulf Coast and Caribbean — ranks among the most economically exposed regions, regularly leading the world in insured losses from hurricanes.

Based on the percentage of properties rated high or very high risk, the top five U.S. states for hurricane exposure are:

1. Florida;
2. Louisiana;
3. South Carolina;
4. Texas; and
5. Mississippi.

Storm surge, however, often causes the most destruction. HazardHub’s SurgeMax model estimates that 52% of homes in Louisiana — over 910,000 — are vulnerable to storm-surge flooding. In Florida, 34% of homes — or approximately 3 million — are similarly at risk. Other coastal states facing major surge threats include South Carolina (21%) and Delaware (20%).

From global headlines to local action

The Financial Times took on a herculean but essential task: tracing the contours of global climate risk and extreme weather and exploring how it is reshaping risks to cities across the globe. In the wake of the LA wildfires, their reporting underscores a powerful truth: Climate risks can and will encroach upon the world’s major urban areas.

But while the threat is global, the response must be local. From flood-prone neighborhoods in Miami to wildfire-exposed suburbs in Sydney, building adequate resilience depends on access to high-resolution, property-level risk insights. These granular data elements equip insurers, communities, and homeowners with the capability to make more informed decisions, reduce losses, and protect lives.

The path forward demands that data-driven risk awareness be paired with action — locally, precisely and proactively.

Melanie Veltman is senior data manager at Guidewire HazardHub, where she leads efforts to improve the quality and accessibility of hazard and risk data for insurers. She previously spent over a decade at Environmental Risk Information Services (ERIS), culminating in her role as Director of Research & Data, overseeing the development of data policies and managing the collection of millions of environmental risk records across North America.

See also:

• 10 U.S. cities with the highest flood risk
• The 5 costliest U.S. hurricanes since 1900
• 10 Deadliest commercial fires in U.S. history