Global Insured Nat Cat Losses Reach $118bn in 2023

Aon has published its 2024 Climate and Catastrophe Insight report, revealing 380 billion (2022: $355 billion) in global economic loss and $118 billion (2022: $151 billion) in global insured losses during the 12-month period under review - representing a 22 and 31 percent higher loss rate (respectively) than the 21ct century average. That represents a 69 percent (2022: 58 percent) protection gap.

Contributing to these losses were 398 global events, including a record 66 billion-dollar economic loss events and 37 billion-dollar insured loss events. Severe convective storms, particularly in the U.S. and Europe, were the leading contributor to insured losses. Aon CEO Greg Case says record breaking floods, fires and heatwaves show that climate change is not a probability, but a certainty - and that the protection gap creates substantial opportunity to offer client solutions. I

The report noted that in terms of climate, 2023 was the hottest year on record with 'unprecedented temperature anomalies', and all-time highs observed in 24 countries and territories. With efforts to limit global warming, Aon says investors can consider climate change from three perspectives: protecting their portfolios against financial risks; benefiting from growth opportunities in climate solutions, and determining how to have a positive impact and play a role in a world moving to net-zero.

"Amidst increasing volatility and complexity, there is a significant opportunity for organizations to become more resilient to the climate and catastrophe risks highlighted in our report," said Greg Case. "By working across the private and public sector we are accelerating innovation, protecting underserved communities and better addressing the economic impacts of extreme weather to create more sustainable outcomes for businesses and communities around the world

Andy Marcell, CEO of Risk Capital and CEO of Reinsurance at Aon, added: "The findings of the report highlight the need for organizations – from insurers to highly impacted sectors such as construction, agriculture and real estate – to utilize forward-looking diagnostics to help analyze climate trends and mitigate the risk, as well as protecting their own workforces. Risk managers can take advantage of increasingly sophisticated tools and leverage analytics to unlock capital and make better decisions. Equally, the insurance industry plays a critical role in improving the financial resilience of communities within their portfolios and taking the opportunity to bridge the protection gap with new and relevant products."
"The report highlights how communities can be vulnerable to disasters in different ways. For example, earthquakes in 2023 highlighted underinsurance and the importance of regulation and enforcement of building codes," said Michal Lörinc, head of Catastrophe Insight at Aon. "In addition, deadly floods – notably in Libya and India – reinforce the necessity for proper maintenance of infrastructure while the Hawaii fires demonstrated the critical need for reliable warning systems and forecasting."

Source: Aon, https://aon.mediaroom.com/2024-01-23-Number-of-Billion-Dollar-Disasters-in-2023-Highest-on-Record-Aon-Report