Aon Report Highlights Surge in Billion-Dollar Disasters for 2023

Aon's recently released 2024 Climate and Catastrophe Insight report findings show global economic losses from natural catastrophes in 2023 reached $380 billion, 22 percent above the 21st-century average.

Insured losses, surpassing $118 billion, marked the fourth consecutive year exceeding $100 billion. The protection gap, representing the disparity between insured and total losses, widened to 69 percent, emphasizing the need to expand insurance coverage globally, according to the report.

The report identified 398 global natural disaster events, with earthquakes and severe convective storms in the United States and Europe being significant contributors to economic losses.

The number of large-loss natural hazard events reached record levels in 2023, with 66 billion-dollar economic loss events, and 37 billion-dollar insured loss events, according to the report.

Earthquakes caused the most economic losses, while severe convective storms were most costly to insurers. New Zealand, Italy, Greece, Slovenia, and Croatia all recorded their costliest weather-related insurance events on record, Aon said.

Furthermore, in terms of climate, 2023 was the hottest year on record with "unprecedented temperature anomalies," and all-time highs observed in 24 countries and territories, Aon found.

Andy Marcell, CEO of risk capital and CEO of reinsurance at Aon, said, "The findings of the report highlight the need for organizations—from insurers to highly impacted sectors such as construction, agriculture, and real estate—to utilize forward-looking diagnostics to help analyze climate trends and mitigate the risk, as well as protecting their own workforces. Risk managers can take advantage of increasingly sophisticated tools and leverage analytics to unlock capital and make better decisions. Equally, the insurance industry plays a critical role in improving the financial resilience of communities within their portfolios and taking the opportunity to bridge the protection gap with new and relevant products."

The top 10 global economic loss events in 2023 were as follows.

1. Turkey and Syria earthquakes with $92.4 billion economic loss and $5.7 billion insured loss
2. China floods with $32.2 billion economic loss and $1.4 billion insured loss
3. Hurricane Otis with $15.3 billion economic loss and $2.1 billion insured loss
4. La Plata Basin drought with $15.3 billion economic loss and $1.0 billion insured loss
5. US drought with $14.0 billion economic loss and $6.5 billion insured loss
6. Emilia-Romagna floods with $9.8 billion economic loss and $0.6 billion insured loss
7. US severe convective storm with $6.2 billion economic loss and $5.0 billion insured loss
8. Europe severe convective storm with $5.8 billion economic loss and $3.0 billion insured loss
9. Hawaii wildfires with $5.5 billion economic loss and $3.5 billion insured loss
10. US severe convective storm with $5.5 billion economic loss and $4.4 billion insured loss
11. All other events with $178.0 billion economic loss and $84.8 billion insured loss

Total loss: $380 billion economic loss and $118 billion insured loss.