‘Significant toll’: Aon breaks down $600 billion disaster bill
Aon’s annual climate and natural catastrophe report shows more than 60% of global losses last year were uninsured, with insurers footing a $US145 billion ($237.76 billion) bill.
It was the sixth-costliest year for insurers, with the sum up nearly $US20 billion ($32.79 billion) from 2023. The protection gap fell from 68% in 2023.
Losses were driven by hurricanes Helene and Milton, which hit parts of the US and Mexico within two weeks of each other and notched $US37.5 billion ($61.49 billion) of insured losses.
The larger of the hurricanes, Helene, led to an economic loss of $US75 billion ($122.98 billion), of which only $US17.5 billion ($28.69 billion) was covered.
Global economic losses were $US368 billion ($603.41 billion), making it the ninth straight year of losses exceeding $US300 billion ($491.91 billion).
Other key economic loss events were an earthquake in Noto, Japan, flooding in Spain and flooding in China, which had minimal insured coverage.
Spain, Brazil, the UAE and Vietnam all recorded their costliest natural disaster insurance events.
Aon CEO Greg Case said: “The devastating events of 2024 underscore the significant economic toll of climate risk. Evidenced by the data in our report – and the tragic destruction in California at the beginning of 2025 – extreme weather remains a powerful force driving the complexity and volatility that businesses and communities face and emphasises the urgent need for innovative solutions to address this growing challenge.”
Mr Case says without mitigation efforts, the coverage gap will continue to be a problem for many communities.
“Part of the solution requires investments in technology and analytics to model and price the risks and attract deeper capital pools that can see a potential return on investment to take on these risks. Capital will not go where it is not protected – and the events from 2024 should stimulate innovation across our industry to strengthen the global economy.”
Aon Risk Capital CEO Andy Marcell said: “The insurance industry – and broader financial community – has the opportunity to bring new sources of capital to protect vulnerable communities and strengthen the global economy.
“The collaboration between various stakeholders will be crucial in developing public-private partnerships and innovative insurance products that offer a sustainable way of closing the protection gap.”