Natural disasters cost global economy USD 93 billion in 1H2021, according to Aon Catastrophe Report

21 July 2021 — Daniela GHETU
Insurance claims from natural catastrophes breach 10-year average, exceeding USD 42 billion, Aon's Global Catastrophe Recap: First Half of 2021 report concludes its evaluation of the impact of natural disaster events that occurred worldwide in the first six months of the year.

Published by Impact Forecasting, Aon's catastrophe model development team, the report reveals that global natural disaster events during 1H 2021 caused total economic losses estimated at USD 93 billion - 32% lower compared to the 10-year average (USD 136 billion). Meanwhile, insured losses were estimated at USD 42 billion - 2% higher than the 10-year average (USD 41 billion). These totals are preliminary and will change as losses continue to develop.

Taking a longer-term perspective, insured losses were 39% higher than the 21st century average (USD 30 billion) and 101% higher compared to the average since 1980 (USD 21 billion), while economic losses were 16% lower (USD 110 billion) and 9% higher (USD 85 billion) for the same periods respectively.

Natural disasters were responsible for approximately 3,000 fatalities during the first half of 2021, significantly below the long-term (since 1980) average of 38,900 and the median of 7,600. Fatalities due to temperature extremes were the deadliest type of disaster during the first six months of 2021, being responsible for nearly one third of the death toll. More than 800 fatalities were directly linked to a historic heatwave, which affected parts of Western Canada and the U.S. Pacific Northwest in late June alone. Overall, the Asia-Pacific region (APAC) recorded slightly less than half of the global death toll (more than 1,400 fatalities).

The 163 notable natural disaster events recorded by Impact Forecasting for 1H 2021 was below the 21st century average of 191 and the median of 197. There were at least 22 separate billion-dollar economic events during the first half of the year - led by the United States with 10 events; APAC with six events; Europe, Middle East and Africa (EMEA) with four events and the Americas (outside of the U.S.) with two events.

The costliest event was the Polar Vortex-induced period of extreme cold in the United States, which caused 217 fatalities and an insured loss of at least USD 15 billion, with loss development expected for months to come.

Insured losses resulting from natural catastrophes during the period were notably above average in the United States (+76%) and EMEA (+32%) compared to the 21st century 1H average. Conversely, losses were lower in APAC (-1%) and in the Americas (-54%).

Steve Bowen, managing director and head of Catastrophe Insight on the Impact Forecasting team at Aon, said: "The first half of 2021 became the costliest first six months of the year in terms of natural disasters for the insurance industry since 2011, despite recording a below-average number of events. The most significant event was the prolonged February freeze in North America associated with the Polar Vortex that became the costliest winter weather-related event ever recorded. The juxtaposition of observed record heat and cold around the globe highlighted the humanitarian and structural stresses from temperature extremes. As climate change continues to amplify the severity of weather events, it becomes more imperative to explore ways to better manage the physical and non-physical risks that are more urgently requiring actionable solutions."

Read the full Global Catastrophe Recap: First Half of 2021 report.

Along with the report, readers can access current and historical natural catastrophe data and event analysis on Impact Forecasting's Catastrophe Insight website.