2020’s Natural Disaster Losses Increased As ‘Connected Extremes’ Become More Visible
Economic losses due to natural catastrophe events around the world were 8% higher than the average annual losses for the 21st century so far. And more and more of those costs aren’t protected by insurance.
Aon PLC’s annual Weather, Climate and Catastrophe Insight report, which evaluates trends in natural disaster events, has highlighted the 416 catastrophe events of last year and the overall $268 billion USD in financial losses, and while private sector and government-sponsored insurance program covered $97 billion, that leaves a 64% portion of uncovered losses – an increasingly large “protection gap.”
The response to COVID-19 has also increased focus on other systemic risks and the resulting business priorities. As a result, “connected extremes” are getting more attention, and leading organizations maybe be defined by their ability to manage concurrent catastrophic events. The report also stresses the need for enhanced collaboration between the public and private sectors to close the rising protection gap in the future.
Some of 2020’s most significant events include: