Global brokerage Aon revealed that 86% of economic losses stemming from climate disasters in the Asia Pacific region in 2022 were not insured.
According to the firm’s 2023 Weather, Climate and Catastrophe Report: Asia Pacific Insights, the region suffered losses equating to $80 billion, with only $11 billion covered by insurance. This makes 2022 the fifth-costliest year for insurers globally, with six of the top 10 climate events taking place in Asia.
Pakistan, India, southern China, and South Korea all saw record rain and significant flooding in the previous year. Regionally speaking, Pakistan and China tied for the costliest weather events in Asia last year, with both incurring $15 billion in economic losses. Pakistan, however, had a higher death toll when it came to climate disasters, with 1,739 deaths recorded from its seasonal floods.
Japan’s Fukushima earthquake ranked after both Pakistan and China with $9.1 billion in economic losses and four deaths recorded. Another China event – the annual drought – followed suit with $7.6 billion in losses. Capping the top 10 are the seasonal floods in India with $4.5 billion in economic losses, although it’s also by far the deadliest individually; this weather event cost 2,135 people their lives.
While there are some outliers here and there, flood losses are still the costliest across the region for the third straight year, accounting for 61% of the total economic losses. South Asia remains vulnerable as it has a very wide protection gap due to the scarcity of flood insurance cover. Across the world, approximately 31,000 people lost their lives due to global natural catastrophe events in 2022, with APAC responsible for an estimated 4,000.
“The extreme weather in the region throughout the year highlights the continuing need to strengthen resilience by adopting effective adaptation and risk management strategies,” Aon Asia Pacific Reinsurance Solutions CEO George Attard said. “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,” he said.
Recently, Aon partnered with Lloyd’s and Vienna Insurance Group to help Ukraine in its recovery and reconstruction by facilitating foreign (re)insurance capacity.
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