28 June 2023
Discover the devastating impact of catastrophes and natural disasters in the Asia Pacific region during 2022, resulting in an enormous total economic loss of USD 80 billion.
In a world increasingly impacted by natural disasters and climate change, organizations face the challenge of managing volatility and enhancing resilience. Aon plc, a prominent global professional services firm, has released its highly anticipated 2023 Weather, Climate, and Catastrophe Report: Asia Pacific Insights. This report sheds light on key trends in natural disasters and climate events, providing valuable insights for decision-makers striving to navigate these challenges effectively.
Asia Pacific Natural Disasters and Economic Losses
According to the report, the Asia Pacific region experienced an alarming economic loss of USD 80 billion due to natural disasters in 2022. Shockingly, only USD 11 billion of this staggering sum was covered by insurance. Furthermore, 2022 ranked as the fifth costliest year on record for insurers worldwide, with six of the top 10 catastrophic events occurring in Asia Pacific. Notably, recurring flooding posed a persistent threat, with annual losses surpassing USD 30 billion since 2010. Countries such as Pakistan, India, southern China, and South Korea faced record rainfall and devastating floods in 2022.
Key Events and Losses
The report highlights the two significant geophysical disasters that caused approximately USD 1 billion each in economic losses during 2022: the March Fukushima Earthquake in Japan and the September Sichuan Earthquake in China. Moreover, it underscores the unfortunate loss of approximately 31,300 lives globally due to natural catastrophes, with Asia Pacific accounting for roughly 4,000 of these deaths. Encouragingly, the number of fatalities caused by tropical cyclones reached its lowest point in at least 66 years. This achievement is attributed to both below-average activity and improved disaster response and adaptation measures. Furthermore, Asia Pacific witnessed a decrease in tropical cyclone losses, with the northwest Pacific and north Indian oceans recording their fourth and fifth lowest accumulated cyclone energy (ACE) scores since 1991, respectively.
Enhancing Resilience and Risk Management Strategies
George Attard, Chief Executive Officer of Reinsurance Solutions, Asia Pacific at Aon, emphasizes the pressing need to strengthen resilience by adopting effective adaptation and risk management strategies. Attard highlights the importance of advanced analytics, warning systems, and a data-driven approach to assess the potential impact of events and enhance disaster response. Organizations, regardless of size, must shift towards comprehensive risk mitigation approaches that utilize data, statistics, and analytics to make informed decisions. By doing so, businesses can protect and grow their operations while addressing emerging and evolving risks.
Protection Gap and Areas for Improvement
The report reveals a stark reality: nearly 86 percent of economic losses in the Asia Pacific region remain uncovered by insurance. Flood losses continue to dominate, representing more than 61 percent of the total economic loss for the third consecutive year. The protection gap is particularly significant in South Asia, where flood insurance coverage remains limited. The report underscores the prominence of flooding in recent years, influenced by continuing La Niña conditions. Sydney, Australia, Sindh, Pakistan, and Meghalaya, India, experienced prolific rainfall, increasing the risk of deadly landslides and river overflow.
Climate Impacts and Humanitarian Consequences
The report highlights notable climate impacts in different regions. India and Pakistan faced extreme high temperatures in March 2022, with India experiencing its hottest March on record since 1901. Japan witnessed a record number of hospital admissions due to heatwaves, following an early end to the plum rain season. China, on the other hand, encountered its second driest summer and the most extensive and prolonged heatwave in recorded history.
Additionally, the report sheds light on the devastating monsoonal floods in Pakistan, which resulted in 1,739 lives lost and affected over 33 million people. The ongoing impacts included acute malnutrition, waterborne diseases such as typhoid, diarrhea, and malaria, and overwhelmed healthcare facilities due to the destruction caused by flooding. The Pakistan Meteorological Department reported that the country experienced rainfall 175 percent above average from July to September 2022.
Building Resilience through Collaboration and Analytics
The Aon report emphasizes that while technological innovation provides better insights and assessment of damages during and after catastrophic events, resilience and climate-related consequences require multi-faceted strategies. These strategies must address physical risks and workforce health, accounting for climate change risk mitigation on all fronts. Brad Weir, Head of Analytics for Asia at Aon, highlights the opportunity for new solutions in bridging the 86 percent “protection gap.” Through collaboration between the private and public sectors and data-driven analytics, organizations can transform climate science into actionable measures. These actions not only strengthen their own risk mitigation but also contribute to safeguarding the communities in which they operate.
The 2023 Weather, Climate, and Catastrophe Report: Asia Pacific Insights by Aon offer vital insights into natural disaster and climate trends. It underscores the need for organizations to adopt data-driven and analytical approaches, leverage advanced technologies, and implement comprehensive risk management strategies. By doing so, businesses can better protect their assets, respond effectively to emerging risks, and navigate the evolving landscape of natural disasters and climate change. Through collaboration and innovative solutions, it is possible to enhance resilience and create a safer, more sustainable future for all.
The top 10 global economic loss events in 2022 were:
|Date||Event||Location||Deaths||Economic Loss||Insured Loss|
|($ billion)||($ billion)|
|09/27 – 10/01||Hurricane Ian||United States, Cuba||157||95.5||52.5|
|Annual||European Drought||Southern, Western & Central Europe||N/A||22||3|
|Annual||U.S. Drought||United States||N/A||16||8|
|06/14 – 10/30||Pakistan Seasonal Floods||Pakistan||1,739||15||0.1|
|06/01 – 09/30||China Seasonal Floods||China||195||15||0.4|
|02/23 – 03/31||QLD & NSW Floods||Australia||22||8||4|
|02/18 – 02/19||Windstorm Eunice||Western & Central Europe||17||4.5||3.4|
|05/17 – 10/31||India Seasonal Floods||India||2,135||4.2||0.1|
|All other events||~27,100||115.6||57.4|
|TOTALS||~31,300||313 billion||132 billion|