Number of Billion-Dollar Disasters in 2023 Highest on Record: Aon Report
LONDON, Jan. 23, 2024 /PRNewswire/ — Aon plc (NYSE: AON), a leading global professional services firm, has released its highly anticipated 2024 Climate and Catastrophe Insight report. The report reveals alarming data regarding the frequency and economic impact of natural disasters worldwide in 2023, with the number of billion-dollar disasters reaching record levels.
According to the report, there were a staggering 66 billion-dollar economic loss events in 2023, the highest on record. In addition, there were 37 billion-dollar insured loss events, highlighting the significant financial burden placed on insurance companies. Earthquakes emerged as the primary cause of economic losses, while severe convective storms proved to be the most costly for insurers.
The economic losses resulting from these events amounted to $380 billion, surpassing the previous year’s figure of $355 billion. This represents a 22 percent increase above the 21st-century average. Notably, the United States and Europe experienced a surge in severe convective storms, contributing to the overall economic impact.
Global insurance losses also rose significantly, exceeding $100 billion for the fourth consecutive year and surpassing the 21st-century average by 31 percent. However, insurance coverage only accounted for $118 billion of the total losses, leaving a considerable protection gap of 69 percent. This calls for urgent action to expand insurance coverage and bridge the gap to enhance global resilience.
Tragically, 95,000 lives were lost due to natural hazards in 2023, marking the highest number since 2010. Earthquakes and heatwaves were the primary contributors to this devastating loss of life. Furthermore, the report highlights that 2023 was the hottest year ever recorded, with unprecedented temperature anomalies observed in 24 countries and territories.
Commenting on the report, Greg Case, CEO of Aon, emphasized the need for organizations to become more resilient in the face of escalating climate and catastrophe risks. He stressed the importance of collaboration between the private and public sectors to drive innovation and protect vulnerable communities from the economic impacts of extreme weather events.
Andy Marcell, CEO of Risk Capital and CEO of Reinsurance at Aon, echoed Case’s sentiments and highlighted the critical role of risk managers in utilizing advanced diagnostics and analytics to analyze climate trends and mitigate risks. Marcell also emphasized the insurance industry’s responsibility to improve the financial resilience of communities and develop relevant products that address the protection gap.
The Aon report further underlines the vulnerabilities that different communities face in the wake of disasters. It emphasizes the importance of proper regulation and enforcement of building codes to mitigate earthquake-related losses and the necessity for infrastructure maintenance to prevent deadly floods. Additionally, the report highlights the need for reliable warning systems and forecasting in fire-prone areas.
As the world strives to limit global warming, investors are urged to consider climate change from various perspectives. These include protecting portfolios against financial risks, capitalizing on growth opportunities in climate solutions, and actively contributing to the transition to a net-zero economy.
Aon’s 2024 Climate and Catastrophe Insight report provides a comprehensive analysis of global natural disaster trends and offers valuable insights to help organizations make informed decisions to manage volatility and enhance resilience. The full report can be accessed through the following link: https://aon.io/2024-cci-report.
About Aon
Aon plc (NYSE: AON) is a global professional services firm dedicated to shaping better decisions for clients across more than 120 countries and sovereignties. By providing advice and solutions that offer clarity and confidence, Aon helps businesses protect and grow their interests.
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In conclusion, Aon’s latest report highlights the unprecedented number and economic impact of billion-dollar natural disasters in 2023, urging organizations and communities to enhance their resilience in the face of escalating climate risks. It emphasizes the urgent need for increased insurance coverage and collaboration to bridge the protection gap and ensure the financial well-being of vulnerable populations. As the world grapples with the challenges of climate change, the report serves as a valuable resource for decision-makers seeking to navigate and mitigate the impacts of natural disasters.
