Global Insured Losses From Natural Disasters Topped $130B in 2022 in 5th Costliest Year

January 26, 2023

Economic losses from natural disasters in 2022 were estimated at $313 billion, with an insurance price tag of approximately $132 billion, according to Aon.

Roughly 42 percent of economic losses were covered by public and private insurance entities, which translates into a global protection gap of 58 percent — the lowest on record, said Aon’s 2023 Weather, Climate and Catastrophe Insight. (The protection gap is the difference between total economic losses and the amount that is covered by insurance.)

Data show that 2022 was the fifth-costliest year on record for insurers, with approximately $50-$55 billion of global insured losses resulting from Hurricane Ian in the United States.

As the second-costliest natural catastrophe in history from an insurance perspective, Hurricane Ian was responsible for about 30 percent of economic and 40 percent of insured losses globally, said Aon, noting that Hurricane Ian is only surpassed by Hurricane Katrina at $99 billion on a price-inflated basis.

While a large part of the global disaster losses remains uninsured, 2022 recorded one of the lowest protection gaps, close to the record year of 2005 when roughly 40 percent of losses were covered. The report attributes the lower protection gap to the fact that both 2022 and 2005 saw extremely costly hurricane events in the U.S., a country with a relatively mature insurance market.

Additional findings in the 2023 Weather, Climate and Catastrophe Insight report include:

Global Fatalities Decline

Approximately 31,300 people lost their lives due to global natural catastrophe events in 2022, which was well below the 21st century average (73,200) and median (38,900), said Aon, noting that roughly two-thirds of these fatalities can be directly attributed to heatwaves that occurred in Europe in June and July.

“The number of annual human casualties has shown a notable decline in recent decades. The improvements in forecasting, evacuation planning and strategies, increased public awareness, and better building practices have all played a key role. Asia, Africa and South America show the greatest improvements with reduced fatalities,” the report said.

“The devastation that disasters caused around the world demonstrate the need for wider adoption of risk mitigation strategies, including better disaster management and warning systems that improve resilience,” said Michal Lörinc, head of Catastrophe Insight at Aon. “While impacts of climate change become increasingly visible around the world, it is the socioeconomic aspects, demographics and wealth distribution that remain a major driver of financial loss.”

Source: Aon

Photograph: Workers talk atop a building that was heavily damaged by Hurricane Ian at Fort Myers Beach, Fla., on Oct. 9, 2022. (AP Photo/Jay Reeves)