Natural disasters rack up $313 billion in global economic loss in 2022

Streaming HUBJanuary 25, 2023

Natural disasters, many of which are driven by climate change, could cause global economic losses of $313 billion in 2022, insurance broker Aon estimated on Wednesday, less than half of which were insured.

Losses from natural disasters covered by the insurance sector were $132 billion, 57% higher than the 21st century average, leaving a global ‘protection gap’ of 58%.

Still, while the number of catastrophic events such as floods and hurricanes rose — at least 421 individual incidents compared to an average of 396 since 2000 — Aon said the safety gap was the narrowest on record.

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“This was relatively low due to the fact that many of the costliest disasters occurred in countries with mature insurance markets such as the US or Europe, while losses in less covered regions such as Asia were well below average,” said Michael Lorinck, head of catastrophes at Aon. Insight, told Reuters.

According to the report, 75% of global insured losses occurred in the United States with Hurricane Ian in Florida in September 2022, causing between $50 and $55 billion of insured losses out of a total economic loss of $95 billion.

Ships fly over Navarro Lagoon, which has dried up due to climate phenomenon La Nina, on December 5, 2022 in Buenos Aires, Argentina.

Ships fly over Navarro Lagoon, which has dried up due to climate phenomenon La Nina, on December 5, 2022 in Buenos Aires, Argentina.
(Reuters/Agustin Markarian/File photo)

Hurricane Ian is the second costliest natural disaster the insurance sector has ever faced.

Aon estimates that about 31,300 people will die due to natural disaster events in 2022, of which nearly two-thirds were linked to severe heat waves in Europe between June and July.

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In Australia, insured losses linked to floods hit a record high of A$4 billion as a weather pattern associated with wet weather called La Niña extends its effects into 2022, causing heavy rain and flooding across the country .

Similarly, the monsoon season in Pakistan received 175% more rainfall than average from July to September, Aon said, citing the local meteorological department.

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