Natural disasters claimed over 30,000 lives and caused US$313 billion in economic losses globally in 2022, according to the Weather, Climate and Catastrophe Insight report. While economic losses from natural catastrophes did not reach record levels, disasters triggered enormous disruption across many regions with only 42% of the losses covered by insurance.
According to the newly released report by AON, a leading international organization providing professional services on a wide range of risk, retirement, and health solutions, 421 serious natural disasters occurred in 2022, more than the 21st-century average of 396. These killed around 31,300 people with approximately 19,000 deaths occurring as a result of extensive heatwaves in Europe. The number of fatalities, however, remained below average, the report confirmed.
As to disaster-triggered economic losses, these amounted to US$313 billion – 4% above the 21st-century average. Of the total amount, US$132 billion was covered by insurance.
Fig.1. Global Economic Losses from Natural Disasters (2022 $ bn)
Source: Weather, Climate and Catastrophe Insight report
The United States was home to 75% of global insured losses with tropical cyclones and floods triggering the most significant financial burden, causing US$109 billion and US$66 billion of economic losses, respectively.
AON’s head of Catastrophe Insight, Michal Lörinc, commenting on the figures published in the report said:
“The devastation that disasters caused around the world demonstrates the need for wider adoption of risk mitigation strategies, including better disaster management and warning systems that improve resilience.”
Fig.2. Global Economic Losses by Peril (2022 $ bn)
Source: Weather, Climate and Catastrophe Insight report
Hurricane Ian in the United States was the costliest single natural disaster event in 2022 killing 157 people and triggering a US$95 billion economic loss, of which US$52.5 was insured. In Europe, windstorm Eunice was the most expensive disaster since 2010, generating US$3.4 billion in insured losses and killing 17 people. In France alone, extensive hailstorms caused a record-setting US$7.4 billion in payouts.
Droughts led to enormous costs across regions as well. In the United States, economic loss because of this disaster was US$16 billion, in Europe, US$22 billion, and in China, US$4.6 billion.
The lethal flooding in Pakistan that killed over 1,600 and injured around 12,800 people generated a US$15 billion economic loss, of which only US$0.1 billion was insured. Flooding in China killed 195 people and cost US$15 billion in economic losses in total, with only US$0.4 billion being insured.
Fig.3. Significant 2022 Economic Loss Events
Source: Weather, Climate and Catastrophe Insight report
Heatwaves in Europe caused significant disruptions last year with the energy sector being impacted the most. The low water levels in rivers caused interruptions to the cooling systems of power plants and disturbances in hydropower generation. As a result, last year European droughts became the second costliest since 2002 when droughts caused economic losses of US$27.6 billion.
Fig.4. Temperature and Precipitation Anomaly in Europe
Source: Weather, Climate and Catastrophe Insight report
Despite the devastating disasters, little progress was made in terms of financial protection with disaster insurance standing at 42% in 2022 leaving a global protection gap of 58%. The protection gap is an essential reference point as it emphasizes the vulnerability of communities. Michal Lörinc, talking about the “protection gap” in 2022, said:
“It was relatively low due to the fact that many of the costliest disasters occurred in countries with mature insurance markets such as the U.S. or Europe, whereas losses in less-covered regions such as Asia were well below average.”
