The 2023 Weather, Climate and Catastrophe Insight report from Aon plc is out and it shows that 2022 was the fifth costliest year on record for insurers. It also shows that only 42 per cent of the economic loss felt around the world because of natural catastrophes was covered by insurance.

The report identifying global natural disaster and climate trends found that natural disasters globally caused $313-billion in economic damages, a four per cent increase over the 21st century average. Of this, only $132-billion was covered by insurance; 75 per cent of global insured losses occurred in the United States.

Overall, 421 notable natural disaster events were recorded in 2022, up from the 21st century average of 396. Droughts and heatwaves severely impacted Europe, the United States and China. Insurance payouts for drought, for example, were the second highest on record at $12.6-billion globally. Hurricane Ian, meanwhile was the costliest event, causing $95.5-billion in economic losses, $52.5-billion of which was insured. 

Calling for wider adoption of risk mitigation strategies, the extensive report, ringing in at 115 pages, looks at events, historical and regional data and provides a climate review. It examines the protection gap, analyzes billion-dollar economic loss events and discusses net zero and capital investments by the industry.

They add that the report highlights the global natural disasters of 2022 to help quantify and qualify how topics such as climate change, socioeconomics and other emerging issues influence catastrophe risk.

“There are abundant opportunities but success is not guaranteed. This is why collaboration between public, private and societal forces is essential,” the firm writes. “We believe in our collective ability to address one of the greatest challenges of our times in a way that will better serve our clients and society as well.”