2020 natural catastrophes triggered $268B in economic losses globally
The U.S.'s $119 billion economic loss total is a 59% increase from 2019, and 28% higher than the decade average.
A new report from Aon calculates the economic cost of natural catastrophes globally in 2020. Global economic losses from 416 natural catastrophe events resulted in $268 billion in economic losses. Of that total, the U.S. accounts for $119 billion.
2020′s $268 billion bill is 8% above the average annual losses for this century, driven by a changing climate, more people moving into hazard-prone areas and an increase in global wealth, Aon researchers note.
The U.S.’s $119 billion economic loss total is a 59% increase from 2019, and 28% higher than average from the previous decade.
Of the global loss total, private sector and government-sponsored insurance programs covered $97 billion, creating a protection gap — the portion of economic losses not covered by insurance — of 64%.
Researchers say this protection gap highlights “the importance of addressing the underserved by ensuring that there is increased access to affordable insurance products in the future.”
“In a highly volatile world, risk remains ever-present, is more connected and, as a result, is also more severe — and 2020 has underscored this reality,” Greg Case, CEO of Aon, said in a statement. “It has also emphasized the need for enhanced collaboration between the public and private sectors, which will be essential to close the rising protection gap and build resilience against natural catastrophes.”
More than 8,000 people lost their lives due to natural catastrophes in 2020 — the second warmest year on record, according to NOAA. Tropical cyclones were the costliest peril overall, causing more than $78 billion in direct economic damage. Flooding was a close second with a loss cost of $76 billion, followed by severe convective storms with $63 billion.
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