Natural Disasters Caused $368 Billion in Damage Last Year, Aon Report Reveals (Aon)

Natural Disasters Caused $368 Billion in Damage Last Year, Aon Report Reveals

Wednesday, January 29th, 2025 Catastrophe Insurance Industry Property Risk Management

This analysis is based on data from the 2025 Climate and Catastrophe Insight Report by Aon, which provides a comprehensive review of global natural disaster events and their financial impact. The report highlights the increasing complexity and cost of extreme weather events, emphasizing the urgent need for better adaptation and mitigation strategies.

Record-Breaking Economic Losses

In 2024, global economic losses from natural disasters reached $368 billion, exceeding the 21st-century average by 14%. The report identifies Hurricane Helene as the most significant disaster, causing $75 billion in damages, primarily from inland and coastal flooding in the southeastern United States. North Carolina was particularly hard hit, experiencing a one-in-1,000-year rainfall event that led to catastrophic flooding and 243 fatalities, making it the third-deadliest U.S. hurricane of the 21st century. Hurricane Milton followed, bringing $35 billion in economic losses and $20 billion in insured losses as it narrowly avoided a worst-case impact on Florida.

Severe Convective Storms and U.S. Losses

The report notes that in addition to hurricanes, severe convective storms (SCS) in the U.S. accounted for $69 billion in total economic losses, with $61 billion insured, marking the second-highest SCS insured losses on record. These storms included:

  • 17 billion-dollar events causing widespread damage.

  • Hail, tornadoes, and straight-line winds contributing significantly to losses.

  • May 2024 being the most active month, producing half of the top 10 costliest SCS events of the year.

Catastrophic Flooding in Europe, Asia, and South America

Europe faced devastating flooding, with insured losses exceeding $9 billion. According to the report, some of the most notable events included:

  1. Valencia floods in Spain -- One of the deadliest events, causing 231 fatalities and $16.1 billion in damages.

  2. Central Europe, Germany, and the United Arab Emirates -- Major flood events contributing to significant economic losses.

  3. Asia and South America -- Tropical cyclone-related flooding, the Noto Earthquake in Japan, and widespread floods added to uninsured losses.

The Global Protection Gap and Underinsurance Issues

One of the key takeaways from the 2025 Climate and Catastrophe Insight Report is the persistent global protection gap—the difference between total economic losses and insured losses—which stood at 60% in 2024. While this was an improvement from 69% in 2023, it remains a major concern. Key challenges identified in the report include:

Flooding remains an underinsured peril, particularly in low- and middle-income countries.
In the United States, the National Flood Insurance Program (NFIP) covers only a fraction of properties in high-risk flood zones, leaving many homeowners financially exposed.

Key Takeaways

The findings from the 2025 Climate and Catastrophe Insight Report emphasize the urgent need for climate adaptation, stronger building codes, and improved insurance solutions to mitigate financial and human losses. The insurance industry and policymakers must work together to:

  • Enhance disaster preparedness through better forecasting and early warning systems.

  • Promote flood insurance adoption to close the protection gap.

  • Invest in resilient infrastructure to reduce future disaster losses.

For a deeper analysis of global catastrophe trends and risk management strategies, refer to the full 2025 Climate and Catastrophe Insight Report by Aon.


External References & Further Reading
https://www.aon.com/en/insights/reports/climate-and-catastrophe-report
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