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- 86 percent of disaster losses uninsured
- Floods were costliest peril for the third consecutive year, accounting for more than 61 percent of total economic loss
SINGAPORE - Media OutReach - 27 June 2023 - Aon plc (NYSE: AON), a leading global professional services firm, today published its 2023 Weather, Climate and Catastrophe Report: Asia Pacific Insights, which identifies Asia Pacific (APAC) and global natural disaster and climate trends to help make better decisions to manage volatility and enhance resilience. The report reveals that natural disasters in the Asia Pacific region in 2022 caused a USD 80 billion economic loss -- of which only USD 11 billion was covered by insurance.
The report shows that 2022 was the fifth costliest year on record for insurers globally, with six of the top 10 events happening in Asia Pacific. Flooding remained a recurring threat with annual losses exceeding USD 30 billion every year since 2010. Pakistan, India, southern China and South Korea saw record rain and significant flooding in 2022. Floods in Pakistan were the costliest event for the peril, tied with seasonal flood losses in China, which were at their highest since 2016. The only two geophysical disasters that cost approximately USD 1 billion in economic losses in 2022 were the March Fukushima Earthquake in Japan and September Sichuan Earthquake in China.
The report also highlights that approximately 31,300 people lost their lives due to global natural catastrophe events in 2022, with Asia Pacific accounting for approximately 4,000 deaths. The number of fatalities from tropical cyclones was also at its lowest in at least 66 years. This is not only a result of below-average activity, but also improved disaster response and adaptation measures. Tropical cyclone losses in Asia Pacific dropped to one of the lowest with accumulated cyclone energy (ACE) scores in the northwest Pacific and north Indian oceans reaching their fifth and fourth lowest values since 1991, respectively.
George Attard, chief executive officer, Reinsurance Solutions, Asia Pacific at Aon said, "The extreme weather in the region throughout the year highlights the continuing need to strengthen resilience by adopting effective adaptation and risk management strategies. This includes improved mitigation through warning systems and advanced analytics that help assess the potential impact of events and enhance disaster response. There is an increasing need for organisations to shift to a data-driven and analytical approach to address and navigate emerging and evolving risks, build a resilient workforce, have access to new forms of capital, as well as scalable innovative solutions regardless of their size. The data, statistics and analytics of this report are intended to help organisations understand natural disaster and extreme weather trends, quantify and qualify issues influencing catastrophe risk, and make better decisions to protect and grow their business."
Further findings of the 2023 Weather, Climate and Catastrophe Report: APAC Insights include:
- Nearly 86 percent of economic losses in the region are not covered by insurance.
- Flood losses continued to maintain dominance as the costliest peril for the third consecutive year, accounting for more than 61 percent of the total economic loss. Much of the flood losses in 2022 occurred in South Asia, where the protection gap remains very high as flood insurance cover is not widespread.
- In recent years, flooding has been prominent in terms of economic losses, partly from continuing La Niña conditions, which drove prolific rainfall in Sydney, Australia, Sindh, Pakistan and Meghalaya, India, increasing risks of deadly landslides and/or overflowing rivers.
- High temperatures affected India and Pakistan early in March 2022. In India, it was the hottest March on record since 1901.
- In Japan, a record number of people were admitted to hospitals due to heatwaves, which followed an early end to the plum rain season. China had its second driest summer and most extensive and longest heatwave on record.
- Monsoonal floods in Pakistan had a far-reaching humanitarian impact on the country, with 1,739 lives lost and over 33 million people affected. Ongoing impacts were felt through acute malnutrition or waterborne diseases such as typhoid, diarrhea and malaria. Hospitals were overwhelmed as thousands of health facilities were destroyed in the flooding. 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.
While technological innovation has allowed for better insight, including faster and more thorough assessments of damages during and after a catastrophic event, the Aon study examines resilience and the ability to overcome climate-related consequences – not only for physical risks, but also in areas such as the health of the workforce - reiterating the need to build multi-faceted strategies that account for climate change risk mitigation on all fronts.
Brad Weir, head of Analytics for Asia at Aon, said, "While a majority of total losses in 2022 were left uninsured, the 86 percent 'protection gap' highlights the vulnerability of our region's communities, but also the opportunity for new solutions. As climate change continues to affect the frequency, location and intensity of weather events, the physical and tangible risks will continue to evolve. Through private and public sector collaborations and data-driven analytics, organisations can help turn climate science into action to enhance their own risk mitigation and also support addressing the protection gap to better safeguard 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|
|02/23 – 03/31||QLD & NSW Floods||Australia||22||8||4|
|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. For additional regional insights, view the 2023 Weather, Climate and Catastrophe Report: APAC Insights here.
The issuer is solely responsible for the content of this announcement.
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