In its recently published 2024 Climate and Catastrophe Insight report, insurance and reinsurance broker Aon disclosed a huge $118 billion in global insured losses during the 12-month period under review.
This marks the fourth consecutive year that insurance losses have exceeded the 21st-century average, reflecting the increasing impact of natural disasters on the global economy, the report noted.
Global insurance losses during the year soared to 31% above the 21st-century average, surpassing $100 billion for the fourth consecutive year.
Aon pegs economic losses from nat cats at $380 billion from 398 events, a 22% increase above the 21st-century average, leaving a protection gap of 69%, emphasising the urgent need to expand insurance coverage.
The spike was primarily driven by significant earthquakes and relentless severe convective storms (SCS) in the United States and Europe.
The number of large-loss natural hazard events reached unprecedented levels in 2023, with 66 billion-dollar economic loss events and 37 billion-dollar insured loss events.
Earthquakes caused the most economic losses, while severe convective storms proved to be the most costly for insurers.
Natural hazards in 2023 led to the tragic loss of 95,000 lives globally, the highest number since 2010. Earthquakes and heatwaves were the primary contributors to this toll.
2023 emerged as the hottest year on record, with ‘unprecedented temperature anomalies,’ affecting 24 countries and territories.
Greg Case, CEO of Aon, emphasised the need for organisations to enhance resilience in the face of increasing climate and catastrophe risks.
He highlighted the collaborative efforts across the private and public sectors to accelerate innovation, protect vulnerable communities, and address the economic impacts of extreme weather.
Andy Marcell, CEO of Risk Capital and CEO of Reinsurance at Aon, stressed the importance of utilising forward-looking diagnostics to analyse climate trends and mitigate risks, particularly in sectors such as construction, agriculture, and real estate. The insurance industry was identified as playing a critical role in improving the financial resilience of communities and bridging the protection gap with innovative products.
Michal Lörinc, head of Catastrophe Insight at Aon, underscored the vulnerabilities of different communities to disasters and cited examples such as earthquakes revealing underinsurance issues and the necessity for proper infrastructure maintenance and reliable warning systems in the face of deadly floods and fires.
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