Latest from Aon, who note that the cost of repairing infrastructure after Cat events continues to increase, so even if the frequency, or severity, remains the same. In short, the asset value affected by a hurricane, flood or fire is rising and with inflation, will continue to do so.
Aon plc (NYSE: AON), a leading global professional services firm, today published its 2023 Weather, Climate and Catastrophe Insight report, which identifies global natural disaster and climate trends to help make better decisions to manage volatility and enhance global resilience. The report reveals that natural disasters caused a $313 billion global economic loss during the 12-month period under review – 4 percent above the 21st-century average – $132 billion of which was covered by insurance.
Data show that 2022 was the fifth costliest year on record for insurers, with approximately $50-55 billion of the global insured loss total resulting from Hurricane Ian in the United States – the second-costliest natural catastrophe in history from an insurance perspective, surpassed only by Hurricane Katrina in 2005, which resulted in nearly $100 billion in insured losses on a price-inflated basis.
The report also highlights that approximately 31,300 people lost their lives due to global natural catastrophe events in 2022. The total number of fatalities remains below average for now 12 years in a row; however, more than 19,000 of the fatalities were heat-related deaths in Europe alone, primarily as a result of heatwaves.
While a majority of total losses in 2022 were left uninsured, the 58 percent “protection gap” was one of the lowest on record, highlighting 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.