Climate and Catastrophe Insight

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This insight is part 03 of 12 in this Collection.

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2024

Climate and Catastrophe Insight

As climate change affects the frequency and intensity of global natural disasters, how can organizations identify trends to protect people and property?

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Natural Disasters and an Evolving Climate Reveal Vulnerabilities and Opportunities Across the Globe

Damage from global natural disasters in 2023 totalled $380 billion in economic losses, driven by significant earthquakes and severe convective storm (SCS) activity in the United States and Europe. The year marked the hottest on record. These events highlight the need for better disaster preparedness and planning to reduce risk, protect lives and increase resilience.

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  1. Lessons Learned for 2024

  2. Protection Gap

  3. Global and Regional Findings

  4. Industry Insights

Three Climate and Catastrophe Lessons for 2024

Communities around the globe were impacted by the nearly 400 notable disasters in 2023. From extreme heat to severe storms and earthquakes – these events highlight the threat catastrophe risk poses to the way we live and work. We investigate the vulnerabilities to better inform on three opportunities for a more resilient future.

69% Protection Gap Highlights the Opportunity

Only 31% ($118 billion) of the economic losses ($380 billion) were covered by insurance. This is above the 21st century average ($90 billion), highlighting the opportunity to support global communities.

The largest losses of the year are attributed to the Turkey and Syria earthquake, floods in China and Hurricane Otis. Many of these significant disasters across the world generated substantial uninsured damage, costs which often had to be covered by local governments.

The global protection gap is the difference between total economic losses and what's covered by insurance. This remains a critical reference point as it describes the vulnerability of communities and the opportunity for new solutions.

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  • 398

    Notable Natural Disasters

  • 66

    Billion-dollar economic loss events, the highest on record

  • 37

    Billion-dollar insured loss events, the highest on record

Global and Regional Findings

The largest economic loss was the earthquake sequence in Turkey and Syria but all continents recorded notable events.

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  • United States

    Economic losses from natural disasters hit $114 billion with insurance covering 70 percent. SCS events contributed a large portion of the financial toll with $58 billion in insured losses. The Lahaina Wildfire was the deadliest U.S. wildfire in over a century with insured losses of $3.5 billion. 

  • Americas (Non-U.S.)

    Insurance covered $6 billion of the $45 billion in economic losses from natural disasters. Hurricane Otis was the costliest individual event with pay-outs exceeding $2 billion. Drought impacted several regions of South America and Canada suffered from a record-breaking wildfire season.

  • Europe, Middle East and Africa

    The region exceeded $150 billion in economic losses for natural catastrophes – the highest on record and driven by the devastating earthquakes in Turkey and Syria. The region also experienced several major flooding events and at least three billion-dollar insurance events for SCS.

  • Asia and Pacific

    Economic losses hit $65 billion with a protection gap of 91 percent as insurance losses reached $6 billion. Flooding events resulted in $1.4 billion of insured losses in China and $1.3 billion in New Zealand. A multi-week-long heatwave impacted many countries in South and Southeastern Asia.

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Amidst increasing volatility and complexity, there is a significant opportunity for organizations to become more resilient to the climate and catastrophe risks highlighted in our report.

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Greg Case
CEO, Aon

Industry Insights

To identify trends, enhance risk mitigation and seize opportunities, we deep dive into tangible ways organizations can better protect their property and people.

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