Record Natural Disasters in 2023 Reveal Growing Global Vulnerabilities and Opportunities

The year 2023 marked a historic period for natural disasters globally, both in frequency and financial impact. The year experienced nearly 400 natural disasters, revealing significant vulnerabilities and opportunities worldwide. Economic losses were notably above the average, totaling an astonishing $380 billion. This increase was primarily driven by severe earthquakes, including a devastating sequence in Turkey and Syria, and relentless severe convective storm activity, predominantly in the United States and Europe. Insurers faced substantial challenges, covering $118 billion in losses, surpassing both the 21st century and decadal averages. The United States, in particular, suffered from a costly drought, while other regions like New Zealand, Italy, Greece, Slovenia, and Croatia recorded their most expensive weather-related insurance events.

A notable aspect of 2023 was the increase in the global protection gap. Despite efforts to mitigate this gap, a significant portion of losses remained uninsured, especially in regions outside the United States. This phenomenon underscores the continued challenge and opportunity for regions to improve their insurance coverage. The human cost of these disasters was also the highest since 2010, driven largely by fatalities from earthquakes and heatwaves, underlining the year’s status as the warmest on record.

The record-breaking nature of these events, particularly the increase in billion-dollar insured loss events, points to a trend of growing frequency and impact of medium-sized disasters, especially severe convective storms. This shift calls for an urgent need for better disaster preparedness, planning, and resilience building globally.