The latest version of Aon’s annual Weather, Climate & Catastrophe Insight report looks into what happens “when natural disasters and a pandemic collide” – and the results are not pretty.
Aon reported that for 2020, there were a total of 416 natural catastrophe events worldwide that resulted in economic losses of US$268 billion, which is 8% above the average annual losses for this century. The professional services firm noted that this increase is driven by a changing climate, more people moving into hazard-prone areas, and an increase in global wealth.
The report also found that of the US$268 billion total in global economic losses, government-sponsored insurance programs covered US$97 billion, which leaves a significant protection gap of 64%.
“The global response to the socioeconomic volatility caused by the COVID-19 pandemic has increased focus on other systemic risks – particularly climate change – and is causing a fundamental reordering of business priorities,” said Aon CEO Greg Case.
Key findings of the report include:
Aon also compiled a list of 2020’s most significant regional catastrophic events:
Case said that Aon’s report has highlighted the increasing likelihood of “connected extremes,” and reinforces that leading organizations in the future will be defined by the capability to manage the global implications of concurrent catastrophic events.
“In a highly volatile world, risk remains ever present, is more connected and, as a result, is also more severe – and 2020 has underscored this reality,” the CEO concluded. “It has also emphasized the need for enhanced collaboration between the public and private sectors, which will be essential to close the rising protection gap and build resilience against natural catastrophes.”