Climate and Catastrophe Insight Report 2024

Source: Aon
GS III: Disaster and disaster management

Overview

Why in the News?

Climate and Catastrophe Insight 2024 released.

Damage from global natural disasters in 2023 totalled $380 billion in economic losses, driven by significant earthquakes and severe convective storm (SCS) activity in the United States and Europe.
The year marked the hottest on record.
These events highlight the need for better disaster preparedness and planning to reduce risk, protect lives and increase resilience.

Climate risk is a certainty, not a probability.
Throughout 2023, wildfires across Europe and North America, flooding in Asia and record-breaking heatwaves in the U.S. and Latin America.
This demonstrated that severe weather and climate-related risks now pose an existential threat to the way we live and work.

Climate and Catastrophe Insight Report 2024

Economic losses
- Global natural disasters in 2023 resulted in above-average economic losses totalling $380 billion.
- It was driven by significant earthquakes and relentless severe convective storm activity in the United States and Europe.
- The single most catastrophic event was the earthquake sequence that hit Turkey and Syria in February.
The most damaging peril for insurers
- Insurers across the world covered $118 billion, which was above the 21st-century average ($90 billion), as well as the decadal mean ($110 billion).
- U.S. drought and the earthquake sequence in Turkey and Syria ere the costliest events for insurance, considering both public and private entities.
- New Zealand, Italy, Greece, Slovenia and Croatia all recorded their costliest weather-related insurance events on record.
Human toll
- The year 2023 was the deadliest since 2010, which was driven by more than 64,000 fatalities from earthquakes.
- Multiple significant heatwaves around the globe resulted in at least 16,500 heat-related deaths.
Hottest year on record
- Extremely high-temperature anomalies recorded in many parts of the globe resulted in 2023 being reported as the warmest year on record.
- The behaviour of many natural perils continued to be affected not only by the warming trend but also by the El Niño conditions during the year.

In the United States, economic losses from natural disasters in 2023 were estimated at $114 billion, slightly above the long-term mean ($105 billion) and notably above the median since 2000 ($84 billion).
Total economic losses from natural disasters in the Americas (non-U.S.) were roughly $45 billion, of which public and private insurance entities covered $6 billion.
Chile experienced two significant flooding episodes in June and August, with nearly $2 billion in total estimated economic losses
and notable insurance payouts.
Diameter of the largest hailstone ever recorded in Europe (found in Italy on July 24).
Greece was hit by an exceptionally long heatwave with temperatures exceeding 45 °C (113 °F) between July 22 and August 8.
Total economic losses in the APAC (Asia and Pacific) region in 2023 reached $65 billion with a substantial protection gap of 91 per cent.
The South Asia floods (Pakistan and India) left nearly 2,900 fatalities.

Predictive analytics unlock the capability to price future risk
- There is a need to use climate analytics as catalysts that can provide forward-looking diagnostics for a range of extreme events.
- For example, hazard data can be applied to specific locations where a company has assets, giving them a better understanding of their current and future risks.
- As well as helping to address the physical risks of climate, advanced analytics can also provide more clarity for the voluntary carbon market and help finance the energy transition through innovation.
Collaboration is essential to developing effective solutions
- No single industry or discipline can solve it alone.
- Businesses, governments and the scientific community are realizing that they need to bring all of their capabilities together to address climate risk.
Innovation is key to accelerating the path to net zero
- world more sustainable by pledging to achieve net-zero greenhouse gas emissions by
  2030, for example.
- To tackle climate risk and bring about a true net-zero economy, an estimated $150
  trillion in capital will need to be deployed over the next 30 years.

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