Insured losses of $132bn from naturals disasters in 2022
$313bn global economic loss but protection gap lowest on record, says Aon
Insured losses from natural disasters amounted to $132bn in 2022, the fifth costliest year on record for insurers, according to Aon’s 2023 Weather, Climate and Catastrophe Insight report.
Natural disasters caused $313bn of global economic losses during the year, said Aon. This is 4% above the 21st-century average, but the protection gap, at around 58%, was one of the lowest on record. Aon said this “highlighted a positive shift in how businesses are navigating volatility through risk mitigation, and how insurers are providing further protection to underserved communities through access to capital”.
The Aon figures compare to Munich Re’s $120bn insured loss estimate for natural disasters last year.
“This report explores the events and costs of catastrophes and natural disasters in 2022 that created a staggering amount of economic loss,” said Greg Case, CEO of Aon. “But this data also highlights a tremendous opportunity for us to continue to better serve clients. By working together on scalable solutions, we will not only mitigate risk, but bring together public, private and societal forces to accelerate innovation, protect underserved communities and strengthen the economy.”
According to the report, 421 notable natural disaster events were recorded in 2022, higher than the 21st century average of 396, and 75% of global insured losses were recorded in the US, higher than the average of 60%. Windstorm Eunice was the costliest individual European windstorm since 2010, with $3.4bn in insured losses.
Droughts and heatwaves severely impacted Europe, the US, China and other regions, and global insurance payouts for the drought peril were the second-highest on record, at $12.6bn globally, the report revealed. Flood losses in Australia broke the historical record and Sydney recorded the highest annual rainfall, while monsoonal floods hit Pakistan and India.
The report also highlights that approximately 31,300 people lost their lives due to global natural catastrophe events in 2022. Aon noted that the total number of fatalities remains below average for now 12 years in a row, although more than 19,000 of the fatalities were heat-related deaths in Europe alone, primarily as a result of heatwaves.
“The devastation that disasters caused around the world demonstrate the need for wider adoption of risk mitigation strategies, including better disaster management and warning systems that improve resilience,” said Michal Lörinc, head of catastrophe insight at Aon. “While impacts of climate change become increasingly visible around the world, it is the socioeconomic aspects, demographics and wealth distribution that remain a major driver of financial loss. Data in this report will help guide organisations to not only enhance their own risk mitigation but take action to close the protection gap globally to better protect the communities in which we live and work.”
The top 10 global economic loss events in 2022 were:
- Hurricane Ian $95.5bn (insured loss $52.5bn)
- European Drought $22bn ($3bn)
- US Drought $16bn ($8bn)
- Pakistan Seasonal Floods $15bn ($0.1bn)
- China Seasonal Floods $15bn ($0.4bn)
- Fukushima Earthquake $9.1bn ($2.9bn)
- QLD & NSW Floods $8bn ($4bn)
- China Drought $7.6bn ($0.2bn)
- Windstorm Eunice $4.5bn ($3.4bn)
- India Seasonal Floods $4.2bn ($0.1bn)