Direct economic cost of Nat CAT exceeds US$100bn in the region last year

The total direct economic cost of natural disasters in Asia Pacific (APAC) has been listed at $101bn for 2020, says Aon in its global "Weather, Climate & Catastrophe Insight: 2020 Annual Report" released on 25 January.

The $101bn figure was 2% above the 2000-2019 average and 34% higher than the median. However, only 12% (or $12bn) of the economic cost was covered by insurance.

APAC remains a region where the protection gap continues to be a concern as a high portion of disaster costs remain uninsured.

Last year, the Asian continent was heavily affected by one of the most prolific monsoon seasons in decades. Enhanced rainfall from a transition to La Nina conditions aided in hundreds of major rivers breaching flood stage. The worst impacts were felt in China, where the seasonal Mei-yu front brought the most rainfall since 1998. More than 1.4m homes were damaged, and vast swaths of agriculture submerged. The total economic cost in China alone was $35bn.

Cyclones

Tropical cyclone activity in Asia, while well below climatological levels in 2020, still resulted in significant and disastrous impacts. Most notable was Super Typhoon Goni’s record-setting Category 5 landfall in the Philippines. The 195 mph (315kph) storm was the strongest ever recorded globally. Other strong typhoons striking the Philippines included Vamco and Molave. The country cited hundreds of thousands of homes and other properties being damaged or destroyed, and a combined economic toll topping $2bn.

Natural peril activity was also elevated in Oceania. Australia was impacted by a series of notable severe thunderstorm events, that were dominated by the hail sub-peril. One stretch on 19-20 January last year saw the major metro regions of Sydney, Brisbane, Canberra, and Melbourne all be struck by hailstorms that left an insurance bill topping $1.4bn from 131,000 claims. Other hailstorms affected Queensland in April and October and resulted in additional insured payouts in the hundreds of millions of dollars; while a powerful East Coast Low left widespread wind and flood damage from 4-11 February in Queensland and New South Wales.

Also, the historic Australia bushfire season of 2019/20 officially came to an end in May 2020. These fires resulted in insured losses topping $1.6bn.

Global

Worldwide, the 416 natural catastrophe events in 2020 resulted in economic losses of $268bn – 8% above the average annual losses for this century – as costs continue to rise due to a changing climate, more people moving into hazard-prone areas and an increase in global wealth. Of this total, private sector and government-sponsored insurance programmes covered $97bn, creating a protection gap of 64%, says the Aon report.

During the year, more than 8,000 people lost their lives due to natural catastrophes. Tropical cyclone was the costliest peril, causing more than $78bn in direct economic damage. It was closely followed by flooding ($76bn) and severe convective storm ($63bn).

Source: Asia Insurance Review