Insurance and reinsurance broker Aon has reported that global insured losses from natural disasters in H1 2023 totalled $53 billion, which is 46% above the 21st-century average.
According to Aon’s latest catastrophe report, economic losses for the period amount to an estimated $194 billion, and already constitute 60% of the average annual global total.
The data shows that just over 27% of total losses from nat cat events around the globe were insured in the first half of the year, leaving a large protection gap of $141 billion.
So far, the 21st-century average of total losses has been $128 billion, this year marks the 5th highest on record and the highest since 2011.
Insured losses were largely driven by severe convective storm activity in the United States with eight multi-billion-dollar events, on top of the February earthquakes in Turkey, the single costliest disaster. Additionally, two back-to-back billion-dollar disasters impacted the North Island of New Zealand within a three-week period in the first quarter, resulting in losses exceeding $5 billion.
Aon reports a total of 18 total events that resulted in at least $1 billion of insured losses in H1 2023, the highest on record on a price-inflated basis. Major factors for these financial losses were that the disaster costs continued to be affected by inflationary pressure, which is still persistent in many parts of the world, as well as other societal factors including demographics and wealth distribution.
Overall, H1 2023 saw 25 individual billion-dollar economic loss events. All but one of those events were weather-related, with 17 registered in the U.S., followed by four in APAC, three in EMEA and one in the Americas.
Michal Lörinc, Head of Catastrophe Insight, at Aon, commented on the steps to take in the future, “Despite the reality that communities globally remain at risk to catastrophes, only about 27% of economic losses this year have been insured. These devastating events reinforce the importance of resilience and the mitigation of risk – such as enforcing building codes, which was highlighted by the Turkey and Syria earthquakes. As we continue to face interconnected risks, we are focused on scaling risk mitigation and helping organizations make better decisions to close the global protection gap and enrich lives around the world.”
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