A decade of losses revealed: Aon’s Weather, Climate & Catastrophe Insight 2019 Annual Report
While 2020 has already got off to a destructive start with unprecedented wild fire activity in Australia, the world is still counting the cost of 2019’s natural disaster losses. Aon’s recently published Weather, Climate & Catastrophe Insight 2019 Annual Report has revealed that global economic losses related to weather and natural events hit USD232 billion in 2019 – the fourth year in a row that losses have hit USD200 billion or higher. Insured losses for the year came in at USD71 billion, 6% above the average for the 21st Century.
Even though 51% of those insured losses were recorded in the US, the costliest single events were Japan’s Typhoons Hagibis and Faxai which combined cost over 100 lives, and an estimated USD15 billion in losses. During 2019, the costliest individual peril in terms of economic loss was inland flooding at nearly USD82 billion which also had a huge impact on human life with 1,750 fatalities from the Indian monsoon floods making it the deadliest disaster of 2019.
It was a more benign picture closer to home with Windstorm Eberhard in March 2019 the most significant storm in Western Europe, causing USD1.2 billion of insured losses. But soaring temperatures in June and July saw a new all-time temperature record in France of 46.0°C (114.8°F) and in Germany 42.6°C (108.7°F).
As a result of record breaking figures likes these – Aon’s report also revealed that it was the second warmest year on record for land and ocean temperatures since 1851 – climate change is rapidly climbing up the corporate agenda whether due to an increase in related regulation or a recognition of the impact that changing weather patterns will have on business models, or both. For example, the Prudential Regulation Authority now requires banks and insurers to implement stress tests relating to how future climate change scenarios could affect their balance sheets.
Be prepared for a changing climate
Given the decadal period from 2010-2019 marked the costliest in modern records for global natural disasters at USD2.98 trillion, businesses in the UK should be prepared to understand what impact the changing climate will have particularly for real assets such as real estate and infrastructure. Flooding events like those seen across large parts of the UK late last year are likely to be seen more frequently and businesses must ensure they build up their resilience should they be impacted.
Read the full report here