Nearly 400 natural disasters and an evolving climate reveal vulnerabilities and opportunities across the globe; closing the protection gap will continue to pose a challenge but also a huge opportunity for certain regions.
Economic losses were above average due to devastating earthquakes, according to Aon’s 2024 Climate and Catastrophe Insight report.
The report said that global natural disasters in 2023 resulted in above-average economic losses totalling $380bn, which was driven by significant earthquakes and relentless severe convective storm activity in the United States and Europe. The single most catastrophic event was the earthquake sequence that hit Turkey and Syria in February.
Global losses surpassed $300bn for the eighth time in a row and were 22% higher than the long-term average. Considering weather-related disasters only, the global total was close to long-term and slightly below the decadal averages.
The report added that severe convective storms were the most damaging peril for insurers where insurers across the world covered $118bn, which was above the 21st century average ($90bn), as well as the decadal mean ($110bn). US drought and the earthquake sequence in Turkey and Syria were the costliest events for insurance, considering both public and private entities. While no event reached the 10-billion-dollar mark, there were at least 37 billion-dollar disasters in total, marking a new historical record. This underlines the growing frequency of medium-sized events, particularly severe convective storms, and their impact on global losses. SCS was the most damaging peril for insurers.
New Zealand, Italy, Greece, Slovenia and Croatia all recorded their costliest weather-related insurance events on record.
The global protection gap increased to average levels in 2023, after the lowest gap on record in 2022. Significant regional differences still exist: The majority of disaster losses are covered in the United States, but most of the losses in EMEA, APAC and Americas are still uninsured. This shows that closing the protection gap will continue to pose a challenge but also a huge opportunity for certain regions.
The human toll was the highest since 2010, said the report. The year 2023 was the deadliest since 2010, which was driven by more than 64,000 fatalities from earthquakes. Multiple significant heatwaves around the globe resulted in at least 16,500 heat-related deaths.
In addition, 2023 was the hottest year on record. Extremely high temperature anomalies recorded in many parts of the globe resulted in 2023 being reported as the warmest year on record. This became emblematic while a variety of other climate statistics were rewritten amid the wider process of a changing climate. Behaviour of many natural perils continued to be affected not only by the warming trend, but also by the El Niño conditions during the year. M