Management Consulting
Aon
Full Credential Description
In 2023, the most significant challenge faced globally was the Turkey and Syria earthquake sequence, which resulted in over $90 billion in economic losses due to physical damage. This event underscored the vulnerability of regions to natural disasters, particularly in areas with low insurance coverage. The insurance and reinsurance sectors were heavily impacted, with severe convective storms (SCS) being the most damaging peril, accounting for more than 60% of all global insured losses, surpassing all other perils combined. The total economic losses from natural disasters in 2023 exceeded $370 billion, marking a 20% increase above the average. Insured losses approached $120 billion, also above average, highlighting the ongoing protection gap where approximately 70% of total damage was not covered by insurance. This gap was particularly pronounced in the aftermath of the Turkey and Syria earthquake, which only saw about $5.5 billion in insured losses, illustrating the disparity between total economic impact and insurance coverage. To address these issues, Aon emphasized the need for improved disaster preparedness and resilience strategies. Recommendations included enhancing building codes, particularly in earthquake-prone areas, and investing in sustainable infrastructure to mitigate the effects of chronic perils like heat waves, which have been increasingly deadly. The report also highlighted the importance of identifying regions with significant uninsured losses to create opportunities for insurers to enhance community resilience. Overall, the findings from Aon's 2024 Climate and Catastrophe Insight Report indicate a pressing need for the insurance sector to adapt and innovate in response to the growing frequency and severity of natural disasters, driven by climate change and increasing exposure in vulnerable areas.