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Weather, Climate & Catastrophe Insight:
As climate change further influences the behavior of weather events, more people move into known hazard risk areas, and global wealth further accelerates, the humanitarian and financial impact from natural disasters is expected to grow. This will require new climate resilience and mitigation strategies to navigate new forms of volatility, rethink access to capital, and reduce the protection gap as risks are amplified in an increasingly interconnected world.
Economic losses from natural disasters were estimated at $268 billion in 2020
Following a year in which the globe faced a number of significant natural disasters that caused more than USD268 billion in economic damage and the prolonged impacts from the COVID-19 pandemic, the re/insurance industry remained in strong position to comfortably manage any losses as capitalization remained healthy.
*All figures in U.S. Dollars
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Economic vs. Insured Cost of Natural Disasters in 2020
Economic losses
$268 billioN
Global Protection Gap $171 Billion (64%)
Insured Losses
$97 billion
The goal is clear: to provide cover in times of need, help better manage physical risks and address the underserved with more affordable and scalable products.
What can we learn from 2020’s natural catastrophes?
Fusing catastrophe modeling and climate science for more realistic climate risk scenarios
Catastrophe modeling has historically been conducted primarily in the private sector, while academia and government scientists have taken the lead on the science of climate change. Now it is time to fix the blind spots.
The importance of climate change modeling
Mitigating market shocks and managing climate transition
Global and Regional Findings
2020 Annual Report
Interested in real-time updates?
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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While 2020 was not a record-setter in terms of financial losses deriving from natural disasters, there were several notable records set on a regional, peril or event-level scale
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The global protection gap is the difference between total economic losses and what’s covered by insurers.
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2020: When natural disasters and a pandemic collide
Concurrent events will prove critical learning opportunities as the world becomes increasingly complex and faces growing or emerging risks.
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Weather, Climate & Catastrophe Insight: 2020 Annual Report
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Protection Gap
Lessons from 2020
Expert Insights
Global and Regional Findings
COVID-19 Implications
Lessons from 2020
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Featured Insights
Per NOAA: 2020 was the second-warmest year for global land and ocean temperatures in the official record dating to 1880
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Global carbon dioxide emissions dropped 7 percent in 2020, but the atmospheric concentration of carbon dioxide reached a new monthly high of 417.07 parts per million in May
A record 28 individual billion-dollar insured events occurred; surpassing the 21 previously set in 2011
Severe Convective Storms resulted in the highest economic and insured losses for the peril on record
LOREM IPSUM
U.S.
North America (Non-U.S.)
South America
Europe
Africa
Middle East
Asia
Oceania
Global
Twelve named storms and six hurricanes made US landfall, including five storm landfalls in the state of Louisiana alone; which made the 2020 Atlantic Hurricane Season a record-breaking year
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Severe Convective Storm (SCS) was the costliest US peril of 2020; also the costliest year for the peril on record, led by the August 10 Midwest derecho
Major wildfires brought extensive damage across the Western US, making it the third-costliest year on record for the peril
Per NOAA: 2020 ranked as the fifth warmest in the 126-year period of record for the contiguous US; including (unofficially) the hottest global temperature ever reliably measured at Death Valley, CA -- 129.9°F (54.4°C)
U.S.
Twin major hurricanes Eta & Iota made landfall within a two-week span leaving catastrophic impacts in highly vulnerable areas of Central America
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A major hailstorm in the Calgary metro region (Canada) on June 13 resulted in a billion-dollar insurance industry payout; it was the costliest Severe Convective Storm event on record for the local industry
An early 2020 earthquake swarm led to a billion-dollar damage bill in Puerto Rico; the strongest earthquake of the sequence was an M6.4 on January 7
2020 one of the warmest years on record in the US, including (unofficially) the hottest global temperature ever reliably measured at Death Valley, CA -- 129.9°F (54.4°C)
North America (Non-U.S.)
Record heat aided major wildfires across South America; among the worst impacts were noted in the Pantanal region in Brazil, Bolivia, and Paraguay
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Early season excess precipitation and flooding transitioned to a notable deficit as the strongest La Niña in years developed in the Pacific Ocean
Extended drought conditions resulted in reduced agricultural crop yields in Brazil and Argentina
2020 one of the warmest years on record in the US, including (unofficially) the hottest global temperature ever reliably measured at Death Valley, CA -- 129.9°F (54.4°C)
South America
Reduced severe convective storm damage resulted in Europe’s lowest annual insured losses in 14 years, despite Ciara becoming the costliest windstorm since Xynthia (2010)
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Economic losses from the March 22 Zagreb earthquake reached into the billions following extensive structural damage
European insurers bore a relatively small portion of total economic losses (32%), further highlighting the protection gap
2020 one of the warmest years on record in the US, including (unofficially) the hottest global temperature ever reliably measured at Death Valley, CA -- 129.9°F (54.4°C)
Europe
The October 30 Izmir Earthquake was the deadliest tremor of 2020 with 117 fatalities, insurers processed tens of thousands of claims
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Record January rainfall in Israel prompted a nearly $500 million payout by insurers; among the highest on record for the local industry
Devastating floods impacted parts of Iran as provinces still coped with record-breaking flood damage from 2019
2020 one of the warmest years on record in the US, including (unofficially) the hottest global temperature ever reliably measured at Death Valley, CA -- 129.9°F (54.4°C)
Middle East
Cyclone Gati became the strongest storm on record to make landfall in Somalia and spawned two years’ worth of rain in 48 hours
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Widespread flooding affected Western, Central and Eastern Africa throughout 2020 and claimed more than 1,000 lives
Water in the African Great Lakes rose to their highest levels in decades, leading to significant displacement in multiple countries
2020 one of the warmest years on record in the US, including (unofficially) the hottest global temperature ever reliably measured at Death Valley, CA -- 129.9°F (54.4°C)
Africa
La Niña amplified seasonal monsoon flooding in Asia leaving a financial toll topping USD55 billion; more than half of the economic cost occurred in China
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Super Typhoon Goni became the world's strongest landfalling cyclone on record with 195 mph (315 kph), 1- minute average sustained winds, when it struck the Philippines
The hottest temperature ever recorded above the Arctic Circle occurred on June 20, 2020; 100.4°F (38.0°C) at Verkhoyansk, Russia
Protection gap vulnerabilities were further highlighted as most flood and tropical cyclone-related damage was left uninsured; the gap was most notable in South Asia
Asia
Australia cites its fourth-warmest year on record following historic 2019/2020 bushfire season
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Multiple major hailstorms and a powerful East Coast Low prompted a multi-billion-dollar insurance bill for the local industry in Australia
Cyclones Harold and Yasa struck the South Pacific Islands as Category 4-equivalent storms; causing extensive damage in Vanuatu and Fiji
Protection gap vulnerabilities were further highlighted as most flood and tropical cyclone-related damage was left uninsured; the gap most notable in South Asia
Oceania
Mitigating market shocks and managing climate transition
As the world warms, catastrophic events will increase in frequency and intensity and in ways that are impossible to predict using conventional risk assessment methods.
Mitigating market shocks and managing climate transition
The importance of climate change modeling
Catastrophe modeling has historically been conducted primarily in the private sector, while academia and government scientists have taken the lead on the science of climate change. Now it is time to fix the blind spots.
The importance of climate change modeling
Best practices for a bespoke view of risk
Through the process of developing a bespoke view of risk, insurers reduce their dependence on model vendors to measure their catastrophic risk and gain greater confidence in their risk tolerance thresholds.
Best practices for a bespoke view of risk
Best practices for a bespoke view of risk
Humanitarian impact of extreme events in the COVID-19 environment
Approximately 235 million people (1 in 35 worldwide) needed assistance from natural peril, geopolitical, or COVID-related incidents in 2020.
Click on the regions to explore the fatalities from natural catastrophes in comparison with COVID-19
Americas
APAC
EMEA
United States
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1000
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0.01
0.1
1
10
COVID-19 deaths per million people
Disaster deaths per million people
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Global
Global
Global
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
COVID-19 Data Repository by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University
Approximately 235 million people (1 in 35 worldwide) needed assistance from natural peril, geopolitical, or COVID-related incidents in 2020.
Americas
APAC
EMEA
United States
COVID-19 deaths per million people
Country
Disaster deaths per million people
COVID-19 deaths per million people
Country
Disaster deaths per million people
0,75
8,76
10,70
0,47
8,91
6,01
0,71
8,11
2,72
0,70
1,46
0,55
0,21
0,70
0,39
0,68
0,02
917
269
316
976
25
205
849
932
21
1 143
785
223
36
525
429
102
957
Brazil
Guatemala
Honduras
Mexico
Nicaragua
El Salvador
Colombia
Panama
Haiti
Peru
Bolivia
Dominican Rep
Venezuela
Puerto Rico
Costa Rica
Jamaica
Argentina
COVID-19 deaths per million people
Country
Disaster deaths per million people
0,71
1 045
United States
COVID-19 deaths per million people
Country
Disaster deaths per million people
1,74
2,58
14,35
0,27
1,74
7,24
2,83
0,73
1,58
0,66
0,90
0,60
4,14
2,44
0,33
0,07
0,31
4,46
0,15
0,13
0,03
0,04
108
46
64
3
46
56
0
81
84
26
18
1
1
0
10
49
9
2
208
20
18
0
India
Pakistan
Nepal
China
Bangladesh
Afghanistan
Vietnam
Indonesia
Philippines
Japan
South Korea
Thailand
Papua New Guinea
Mongolia
Sri Lanka
Myanmar
Tajikistan
Fiji
Kyrgyzstan
Hong Kong
Uzbekistan
Taiwan
2,83
4,43
7,41
0,75
2,74
7,33
0,95
2,69
1,66
0,87
0,60
0,39
1,19
0,73
0,19
0,64
0,26
248
31
20
6
33
7
7
4
5
0
657
75
9
12
17
5
1 227
Turkey
Kenya
Yemen
Nigeria
Sudan
Rwanda
DRC
Niger
Mozambique
Tanzania
Iran
Egypt
Madagascar
Angola
Ethiopia
Ivory Coast
Italy
0,30
1,34
0,28
0,62
2,21
1,33
0,17
0,61
0,06
0,12
0,20
8,10
0,41
0,81
1,51
0,36
0,47
1 087
464
5
4
80
8
480
6
386
992
319
62
673
384
75
24
1 081
Spain
Greece
Uganda
Burkina Faso
Norway
Togo
South Africa
Chad
Russia
France
Iraq
Djibouti
Netherlands
Israel
Mauritania
Senegal
Czech Republic
0,11
0,42
0,04
0,16
0,08
0,59
0,49
0,20
0,48
0,30
0,12
0,25
0,11
0,10
0,37
0,01
0,18
441
0
1 084
820
754
294
955
864
1 297
1 234
883
740
691
677
536
403
392
Ukraine
Burundi
United Kingdom
Romania
Poland
Oman
Croatia
Sweden
Slovenia
Bosnia
Switzerland
Moldova
Austria
Portugal
Lithuania
Germany
Slovakia
0,30
1,34
0,28
0,62
2,21
1,33
0,17
0,61
0,06
0,12
0,20
8,10
0,41
0,81
1,51
0,36
0,47
1 087
464
5
4
80
8
480
6
386
992
319
62
673
384
75
24
1 081
Spain
Greece
Uganda
Burkina Faso
Norway
Togo
South Africa
Chad
Russia
France
Iraq
Djibouti
Netherlands
Israel
Mauritania
Senegal
Czech Republic
2,83
4,43
7,41
0,75
2,74
7,33
0,95
2,69
1,66
0,87
0,60
0,39
1,19
0,73
0,19
0,64
0,26
248
31
20
6
33
7
7
4
5
0
657
75
9
12
17
5
1 227
Turkey
Kenya
Yemen
Nigeria
Sudan
Rwanda
DRC
Niger
Mozambique
Tanzania
Iran
Egypt
Madagascar
Angola
Ethiopia
Ivory Coast
Italy
COVID-19 deaths per million people
Country
Disaster deaths per million people
0,75
8,76
10,70
0,47
8,91
6,01
0,71
8,11
2,72
0,70
1,46
0,55
0,21
0,70
0,39
0,68
0,02
917
269
316
976
25
205
849
932
21
1 143
785
223
36
525
429
102
957
Brazil
Guatemala
Honduras
Mexico
Nicaragua
El Salvador
Colombia
Panama
Haiti
Peru
Bolivia
Dominican Rep
Venezuela
Puerto Rico
Costa Rica
Jamaica
Argentina
Natural catastrophes are devastating and displacing, impacting countless lives. The insurance and risk industry is leading the way in rebuilding communities.
Play your part in climate resilience
Play your part in climate resilience
The goal is clear: to provide cover in times of need, help better manage physical risks and address the underserved with more affordable and scalable products.
What can we learn from 2020’s natural catastrophes?
2021 Weather, Climate and Catastrophe Insight
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