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How are we building weather and climate
As climate change continues to affect the frequency and intensity of weather events, and as demographic patterns shift around the world, the impact of natural disasters – including financial costs − will only increase. Building resilience and properly planned disaster mitigation efforts are therefore critical.
Economic losses from natural disasters topped $232 billion* in 2019 – bringing to a close the costliest decade for natural catastrophes.
Following two costly back-to-back years for natural disasters, 2019 witnessed several moderately large catastrophes. While losses topped $232 billion, a well-capitalized re/insurance industry comfortably managed recent losses.
*All figures in U.S. dollars
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Economic vs. Insured Cost of Natural Disasters in 2019
Economic losses
$232 billioN
Global Protection Gap $161 Billion
Insured Losses
$71 billion
Steve Bowen, Meteorologist and Head of Catastrophe Insight at Aon, discusses the 2019 natural disaster events that led to economic damage of $232 billion, of which only $71 billion was covered by insurance.
Which natural disaster events caused $232 billion in economic costs in 2019?
Influence of climate on weather volatility highlights need for resilience
Last year saw 41 events that caused upwards of
$1 billion in economic losses and 12 events that led to $1 billion of insured losses. Typhoons Hagibis and Faxai, both occurring in Japan, were the two costliest insurance events at a combined amount of $15 billion. The costliest peril category was inland flooding at nearly $82 billion, followed by tropical cyclone at $68 billion.
After high Japanese typhoon losses in 2018 and 2019, re/insurers continue to develop and use a variety of modelling tools to boost their understanding of the peril risk and implement successfully placed programs.
2018/19: Back-to-Back High Typhoon Losses in Japan
The Impact of Hurricane Dorian
Red Cross Disaster Response Innovations
Financial Sector: Impact of Climate-Related Risks
Global and Regional Findings
Six of the top 10 costliest disasters of 2019 were flood-related, with inland
82
$
the tropical cyclone peril was the costliest of 2018 - the sixth-most expensive year for the
peril since 2000.
billion,
At $
resilience for the next decade?
Hurricane Dorian in The Bahamas was the longest-sustained Category 5 hurricane since 1851 - when record keeping began. Dorian maintained peak intensity for nearly 12 hours and stayed at Category 5 intensity for nearly 30 hours. In addition to the lives lost, economic losses in The Bahamas came in at $8 billion - $2.5 billion of which was insured.
Around the world, many remote communities are missing from maps that responders use to deliver lifesaving aid. To get relief into people’s hands more quickly, The Red Cross uses virtual volunteers to map high-risk areas.
billion
72
Global tropical cyclones led to
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Aon produces weekly, monthly and annual reports, as well as real-time updates on major global catastrophic events as they happen around the world. Visit our Catastrophe Insight website to sign up for these reports.
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The Kincaid Fire was the most destructive of California’s 2019 wildfires, destroying
The costliest insured thunderstorm-related event – from tornadoes, hail and damaging winds – caused
Spring and summer flooding within the Mississippi, Missouri, Arkansas and Ohio river basins cost a combined
Hurricane Dorian was the costliest and deadliest event in the region, causing an economic loss of
The most expensive disaster for insurers in Canada was a spring flooding event along the St. Lawrence, Ottawa and St. John rivers, which led to at least
European Windstorm Eberhard was the top insurance event with a
Extensive flooding across Iran in March and April resulted in an economic cost of
Mozambique’s Cyclone Idai caused
Direct economic losses and damage from natural disasters in 2019 were estimated at $232 billion, $229 billion of this resulting solely from weather disasters. Last year was the eighth costliest year in terms of weather-related natural disasters.
Global
A little over a half − 51 percent − of the global insured losses were recorded in the U.S. The country recorded $68 billion in economic loss, of which 53 percent – or $36 billion – was covered by insurance.
U.S.
A total of $107 billion in economic losses were recorded in APAC with only $21 billion of that covered by insurance.
APAC
A total of $39 billion in economic losses were recorded throughout Europe, the Middle East and Africa during 2019. Only $10 billion was covered by insurance.
EMEA
$19 billion in economic losses were recorded in the non-U.S. Americas, only 21 percent of which was covered by insurance.
Americas (Non-U.S.)
The Paraná River floods in Argentina and Uruguay was the costliest South American event at
The 409 natural catastrophe events of 2019 resulted in economic loss of $232 billion – 3 percent below average annual losses since 2000 - and 20 percent lower than annual losses of the past decade.
Choose a region to see the findings
The global protection gap is the difference between the total economic losses and what’s covered by insurers.
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Record Typhoon-Induced Losses in Japan
The Impact of Hurricane Dorian
Red Cross Disaster Response Innovations
Financial Sector: Impact of Climate-Related Risks
2018/19: Back-to-Back High Typhoon Losses in Japan
Hover cursor over items below to learn more
The Impact of Hurricane Dorian
Red Cross Disaster Response Innovations
Increasing international regulatory focus highlights the need for financial institutions to have a robust climate change strategy: 1) To quantify the potential impact of climate-related risks on assets and liabilities, and 2) To demonstrate how they will manage these risks.
Financial Sector: Impact of Climate-Related Risks
How is climate impacting infrastructure?
As weather patterns shift and become more severe, impact to physical infrastructure will become more acute. With more than $90 trillion needed to meet the world’s current infrastructure needs, Aon’s The One Brief dives deeper into the impact climate change is having on our world’s infrastructure.
Visit the website
flooding being the costliest individual peril at
in economic damage - for insurers, Japan recorded the two costliest events: Hagibis ($9 billion) and Faxai ($6 billion)
68
$
billion
Severe convective storms topped
for the 10th consecutive year globally
30
$
billion
structures
374
in insured losses.
3.6
$
billion
in economic loss
20
$
billion
8.4
$
billion
nearly
2.7
$
billion
of which was insured - most of the losses were in The Bahamas
210
$
million
in payouts
2.4
$
billion
(using the global free market currency conversion)
8.3
$
billion
destroyed more than
1,303
fatalities,
displaced – becoming the biggest global humanitarian crisis of 2019
300,000
homes,
and left nearly
2
million people
and Typhoon Faxai
The seasonal Indian monsoonal floods were the deadliest global event leading to
1,750
fatalities
The top insurance event in Australia was the historic bushfires that extended from November 2019 into January 2020. Insured losses were listed beyond
1
$
billion
What do warming temperatures mean for resilience?
Last year was the second-warmest on record for land and ocean temperatures since records began in 1851. Scientific research indicates that climate change will continue to affect all types of weather phenomena and subsequently result in greater risk of damages across increasingly urbanized areas. As the public and private sectors balance an understanding of the science with smart business solutions, this will lead to new advances that lower physical risk and improve overall awareness.
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1.2
$
billion
loss
Weather, Climate & Catastrophe Insight: 2019 Annual Report
billion
6
$
The two costliest insurance events of 2019 occurred in Japan: Typhoon Hagibis
billion
9
$
billion
$
1
billion
9
$
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