Aon: Global Insured Losses from Natural Disasters Exceeded $130 Billion in 2022, Driven by Second-Costliest Event on Record

Rhea-AI Summary

Aon plc (NYSE: AON) has released its 2023 Weather, Climate, and Catastrophe Insight report, revealing a $313 billion global economic loss from natural disasters in 2022, exceeding the 21st-century average by 4%. Insurance covered $132 billion of these losses, making 2022 the fifth-costliest year for insurers, primarily due to Hurricane Ian, which alone caused $52.5 billion in insured losses. The report highlights a 58% protection gap but notes improvements in risk mitigation strategies. Furthermore, heatwaves led to over 19,000 fatalities in Europe, emphasizing the impact of climate change.

Positive

• Global insured losses from natural disasters reached $132 billion in 2022.
• Improvements noted in risk mitigation, reflected by a 58% protection gap being among the lowest on record.
• Aon identifies opportunities for scalable solutions to better serve clients and enhance resilience.

Negative

• 2022 saw $313 billion in global economic losses, 4% above average, indicating increased volatility.
• Heatwaves in Europe caused more than 19,000 fatalities, underlining severe climate impact.

• Annual Weather, Climate and Catastrophe Insight report reveals $313 billion global economic loss from natural catastrophes
• Prominence of droughts and heatwaves highlighted growing importance of these perils in a warming world

CHICAGO, Jan. 25, 2023 /PRNewswire/ -- 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 21^st-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.

"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."

While technological innovation has allowed for better insight as catastrophes unfold and faster and more thorough assessments of damages after an event, the Aon study examines resilience and the ability to overcome climate-related consequences – not only for physical risks, but in areas like the health of the workforce, reiterating the need to build multi-faceted strategies that account for climate change risk mitigation on all fronts.

Further findings of the 2023 Weather, Climate and Catastrophe Insight report include:

• 421 notable natural disaster events were recorded in 2022, higher than the 21st century average of 396.
• 75 percent of global insured losses were recorded in the United States, which was higher than the average of 60 percent.
• Windstorm Eunice was the costliest individual European windstorm since 2010, with $3.4 billion in insured losses. Widespread hailstorms in France contributed to the second-highest natural disaster payouts for the country on record of €6.9 billion ($7.4 billion).
• Droughts and heatwaves severely impacted Europe, the United States, China and other regions and global insurance payouts for the drought peril were the second highest on record, at $12.6 billion globally.
• Flood losses in Australia broke the historical record as La Niña conditions persisted for a third year and Sydney recorded the highest annual rainfall.
• Monsoonal floods in Pakistan had a far-reaching humanitarian impact on the country. In a summary of the 2022 monsoon season, the Pakistan Meteorological Department noted that country-wide rainfall from July to September was 175 percent above average.
• Both severe drought conditions and a prolonged rainy season in different regions of Latin America reduced agricultural crop yield across the region.

"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 organizations 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:

Date	Event	Location	Deaths	Economic Loss	Insured Loss
				($ billion)	($ billion)
09/27 – 10/01	Hurricane Ian	United States, Cuba	157	95.5	52.5
Annual	European Drought	Southern, Western & Central Europe	N/A	22	3
Annual	U.S. Drought	United States	N/A	16	8
06/14 – 10/30	Pakistan Seasonal Floods	Pakistan	1,739	15	0.1
06/01 – 09/30	China Seasonal Floods	China	195	15	0.4
03/16	Fukushima Earthquake	Japan	4	9.1	2.9
02/23 – 03/31	QLD & NSW Floods	Australia	22	8	4
Annual	China Drought	China	N/A	7.6	0.2
02/18 – 02/19	Windstorm Eunice	Western & Central Europe	17	4.5	3.4
05/17 – 10/31	India Seasonal Floods	India	2,135	4.2	0.1
All other events			~27,100	115.6	57.4
TOTALS			~31,300	313 billion	132 billion

The full report and a short video are available on Aon's interactive microsite. Along with this report, readers can access current and historical natural catastrophe data and event analysis at catastropheinsight.aon.com.

About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business. 

Follow Aon on LinkedIn, Twitter, Facebook and Instagram. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts here.

Media Contact
mediainquiries@aon.com
Toll-free (U.S., Canada and Puerto Rico): +1 833 751 8114
International: +1 312 381 3024

View original content to download multimedia:https://www.prnewswire.com/news-releases/aon-global-insured-losses-from-natural-disasters-exceeded-130-billion-in-2022-driven-by-second-costliest-event-on-record-301730364.html

SOURCE Aon plc

FAQ

What was the total economic loss from natural disasters in 2022 according to Aon?

Aon's report states that the global economic loss from natural disasters in 2022 was $313 billion.

How much of the economic loss was insured in 2022?

In 2022, insurance covered $132 billion of the total global economic loss from natural disasters.

What was the most costly natural disaster in 2022?

Hurricane Ian was the second-costliest natural catastrophe in history, causing approximately $52.5 billion in insured losses.

How many people died due to natural disasters in 2022?

Approximately 31,300 people lost their lives due to global natural catastrophe events in 2022.

Which trends are highlighted in Aon's 2023 report regarding climate change?

The report emphasizes the increasing significance of droughts and heatwaves due to climate change.