Economic and human losses from earthquakes, heat stress, and hydrometeorological events in Asia-Pacific are drawing attention to protection gaps across the region, according to Aon’s 2026 Climate and Catastrophe Insight report. The firm estimates that natural catastrophes caused at least $76 billion in economic losses in Asia-Pacific in 2025. Insurance covered about 10% of that figure, or just over $7 billion, indicating substantial uninsured exposure in both developed and emerging markets.
Aon identifies the 7.7-magnitude earthquake in Myanmar as the largest single contributor to regional catastrophe losses. The event generated nearly US$16 billion in economic losses and US$1.6 billion in insured losses and accounted for more than 20% of total Asia-Pacific economic losses in 2025. Nearly 5,500 people were killed, making it the deadliest natural disaster globally that year. Flood events in China, India, Pakistan, and Southeast Asia added significantly to the regional loss total, affecting residential property, transport infrastructure, and agriculture. In all, at least 15 natural disasters in Asia-Pacific each produced economic losses above US$1 billion, Aon reports. Only three – the Myanmar earthquake, ex-cyclone Alfred, and a major hailstorm in Australia – resulted in insured losses above US$1 billion. “APAC is facing a convergence of climate risks that are no longer isolated or seasonal. From floods to heat and cyclones, the impacts are becoming more complex and disruptive. When earthquake risk is added to the mix, even years with below-average catastrophe activity can have profound consequences for people, businesses, and governments,” said Rupert Moore, CEO of Reinsurance Solutions, APAC for Aon.
For Australia and New Zealand, Aon estimates combined industry catastrophe losses of about US$3.4 billion in 2025, close to the decadal average. The figure reflects the impact of cyclones, severe thunderstorms, and other weather-related events on property, motor, and commercial portfolios, as well as on reinsurance recoveries. In Japan, economic losses from natural disasters exceeded US$700 million, while insured losses were about US$290 million. Aon calculates a protection gap of around 59% for that market. The firm notes that many Asian economies with lower insurance penetration face even larger relative gaps, particularly for earthquake, flood, and other secondary perils.
The report also emphasises the role of extreme heat as an emerging driver of risk in Asia-Pacific. Aon’s analysis indicates that working hours lost to heat stress in the region have more than doubled in the past three decades. The impact is most evident in sectors such as construction, agriculture, and manufacturing, where outdoor or non-climate-controlled work is common. According to the report, higher temperatures are placing additional strain on health systems, energy and transport infrastructure, and labour productivity. This trend has implications for workers’ compensation, health, liability, and business interruption covers, as well as for enterprise risk management and occupational safety policies. “Aon’s 2026 Climate and Catastrophe Insight report highlights the importance of integrated resilience strategies that combine physical risk mitigation, forward looking climate analytics and innovative risk transfer solutions. These approaches can help organisations and governments better anticipate emerging risks, protect vulnerable populations, and sustain economic growth, particularly as private capital plays a growing role in helping to address the protection gap,” Moore said.
On a global basis, Aon estimates that natural catastrophes generated about US$260 billion in economic losses in 2025, with insured losses of US$127 billion. Regional comparisons show higher insurance penetration in the US and Europe, the Middle East, and Africa (EMEA) than in Asia-Pacific. The US recorded US$141 billion in economic losses, with US$103 billion insured. EMEA posted US$21 billion in economic losses and about US$12 billion in insured losses. By contrast, Asia-Pacific’s US$76 billion in economic losses were accompanied by a little over US$7 billion in insured payouts, pointing to wide gaps in coverage for earthquake, flood, and other climate-related hazards.
Across corporate and infrastructure risks in Asia-Pacific, Aon reports that climate-related exposures are frequently underinsured, especially where multiple perils overlap. “Flooding, cyclones, extreme heat, and similar climate risks increasingly overlap, stretching the limits of traditional insurance programmes and leaving corporates exposed to earnings volatility and supply chain disruption. Closing protection gaps, strengthening infrastructure, and protecting people will be critical for businesses as climate volatility becomes a defining feature of the region’s risk landscape,” said Cecilia Tse, director, risk, climate, and sustainability, APAC for Aon.
The findings point to continuing demand for catastrophe capacity, exposure management, and risk analytics. The report indicates that market participants are reassessing how coverage, limits, and deductibles respond to earthquake, flood, cyclone, and heat-related risks and how public-private arrangements may support higher-risk segments. Aon’s Climate and Catastrophe Insight report, now in its 21st edition, summarises global and regional disaster activity, economic and insured loss patterns, and climate-related trends. The firm positions the report as a reference for insurance, reinsurance, and corporate risk professionals involved in capital allocation, pricing, and resilience planning.
