According to Aon, global insurance losses in 2024 were 54% higher than the 21st-century average, covering $145 billion of the $368 billion in natural disaster damages, leaving a protection gap of $223 billion, or 60%.
The $368 billion in economic losses caused by natural disasters in 2024, driven primarily by hurricanes and severe convective storms (SCS) in the U.S., reportedly marks the ninth consecutive year of losses exceeding $300 billion.
“Increases in population, wealth and overall exposure to natural hazards in high-risk areas continue to be a crucial component of growing disaster losses,” Aon’s report explained.
The firm continued, “Even as insured losses far exceeded the average, the protection gap stood at 60%, representing a significant financial headwind to communities, businesses and governments.”
Hurricane Helene, which made landfall in the U.S. in September and caused $75 billion of damages and 243 fatalities was reportedly the costliest global event in 2024.
Meanwhile, Hurricane Milton in October was the costliest single global insured loss event, causing $20 billion in losses.
As per Aon’s report, these events contributed significantly to the fact that 78% of global insured losses were recorded in the U.S.
The firm also highlighted the growing exposure to severe convective storm (SCS) losses in the U.S., which increases the likelihood of billion-dollar disasters.
This risk is said to be further amplified by the continued spatial growth of cities in regions regularly affected by SCS activity, such as Dallas, Houston, and Denver.
Greg Case, CEO of Aon, commented, “The devastating events of 2024 underscore the significant economic toll of climate risk. Evidenced by the data in our report – and the tragic destruction in California at the beginning of 2025 – extreme weather remains a powerful force driving the complexity and volatility that businesses and communities face and emphasizes the urgent need for innovative solutions to address this growing challenge.”
Case added, “When it comes to climate risk, the stakes could not be higher. The $223 billion in uninsured losses in 2024 challenges the ability to rebuild, recover and create more resilience across the globe.
“Part of the solution requires investments in technology and analytics to model and price the risks and attract deeper capital pools that can see a potential return on investment to take on these risks. Capital will not go where it is not protected – and the events from 2024 should stimulate innovation across our industry to strengthen the global economy.”
Andy Marcell, CEO of Risk Capital for Aon, said, “The insurance industry – and broader financial community – has the opportunity to bring new sources of capital to protect vulnerable communities and create greater economic resilience.
“The collaboration between various stakeholders will be crucial in developing public-private partnerships and innovative insurance products that offer a sustainable way of closing the protection gap.”
Michal Lörinc, head of Catastrophe Insight at Aon, noted, “Our understanding of natural hazards continues to evolve, but one trend is clear – we continue to see a greater number of large-scale disasters in terms of financial loss. Businesses and communities need to prepare their people, operations and properties using insights from the latest forecasting models, analytics and reliable climate data.”
The post Aon flags 60% protection gap as nat cat losses reach $368bn in 2024 appeared first on ReinsuranceNe.ws.
