Global insured losses from weather and climate-related events reached roughly $130bn in 2021, according to Aon’s 2021 Weather, Climate and Catastrophe Insight.
The report, which the insurer has just released, outlines how global insured losses topped more than $100bn for the fourth time in five years. This figure also managed to increase 18% between 2020 and 2021, and is far higher than the last century’s average ($74bn) and median ($66bn).
In total, the report reveals a total of $343bn in economic losses during 2021, $328bn of them resulting from wind and climate-related events. In a statement, Aon said that this made 2021 the third-costliest year on record after adjusting for inflation.
Eric Andersen, president of Aon, said: “Clearly there is both a protection and innovation gap when it comes to climate risk. As catastrophic events increase in severity, the way that we assess and ultimately prepare for these risks cannot depend on solely historical data.”
He added: “We need to look to technology like artificial intelligence and predictive models that are constantly learning and evolving to map the volatility of a changing climate.”
According to the report, 71% of the global insured losses were recorded in the US. It was the second year in a row that more than 70% of the world’s global losses had been within the US. The report said that the combined US insured loss in 2020 and 2021 was the highest two-year total on record.
The report added: “Global insured losses have steadily increased in recent decades. Much of this growth can be tied to continued improvement in expanding the number of people with active insurance policies, especially in parts of the world where insurance availability has only recently become more widely available. However, the influence of more substantial catastrophe events – especially by perils not previously identified as expected to have a major impact on an insurance portfolio – has resulted in more claims being filed and processed.”
Meanwhile, Aon estimates that there is a global protection gap of 62%, the lowest it has been since tracking began in 2005, when it was 60%.
Meanwhile, also on Reinsurance News today, Aon revealed that catastrophic bond issuance reached $12.5bn in 2021, beating the previous year’s record of $11bn.
The $130 billion insured loss total from Aon is the highest so far, coming in above the $120 billion estimate reported by global reinsurer Munich Re earlier this month.
