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Global protection gap exposed by September’s nat cat losses: Aon

11th October 2018 - Author: Charlie Wood

The natural catastrophes that unfolded throughout September are expected to inflict tens of billions in economic losses and, according to a report by Aon, highlight the prevalence of global under-insurance.

Aon logoThe report reveals that the U.S endured two tropical cyclone landfalls during the month – Tropical Storm Gordon and the costlier Florence, which made landfall in North Carolina as a category one hurricane.

At least 53 people were killed directly or indirectly by Florence, with total economic losses set to minimally exceed $10 billion, and insured losses expected to reach low-digit billions due to low flood insurance penetration.

“September will be recorded as the costliest month so far of 2018, as global economic losses from natural catastrophes are expected to reach into the tens of billions of dollars,” said Steve Bowen, Impact Forecasting Director and Meteorologist.

Elsewhere, Typhoon Jebi made landfall in Japan and prompted widespread wind and flood damage across numerous prefectures. Total economic losses were expected to reach well into the billions of dollars.

The General Insurance Association of Japan claimed that nearly 486,000 insurance claims had been filed, with the expectation of a multi-billion-dollar payout.

Super Typhoon Mangkhut caused widespread impacts in the Philippines, Hong Kong, and China.

The one-time category five storm killed at least 102 people, and damaged more than 210,000 homes in the Philippines alone.

Total combined economic damage and net loss business interruption was expected to reach into the billions of dollars while the local insurance industry in China and Hong Kong forecast payouts approaching or exceeding $1 billion.

A major magnitude, 7.5 earthquake and tsunami caused catastrophic damage across Indonesia’s Sulawesi Island on 28 September, killing more than 2,000, with many more missing. Total economic damage was expected to approach or exceed $1 billion.

Another strong earthquake struck the Japanese island of Hokkaido on 6 September, killing 41 people and injuring 680 others. The GIAJ cited that 12,279 insurance claims had been filed.

“A series of significant catastrophes – including Hurricane Florence, Typhoon Jebi, Typhoon Mangkhut, and the Indonesian earthquake – were poised to cause tens of billions in economic damage,” added Bowen.

“Each of these events were also noteworthy since the majority of losses are likely to be uninsured. This once again highlights that whether a country is considered mature or emerging, there continue to be gaps in insurance coverage on either a market-wide or individual peril basis.”

“As natural peril risks increase, it becomes even more important to close those gaps to help people in the recovery process.”

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