Elevated Severe Convective Storm Losses Reduced Protection Gap to 50 Percent, Aon 1H Global Catastrophe Report
80 percent of 1H global natural catastrophe claims related to U.S. events
LONDON, July 18, 2024 /PRNewswire/ -- Aon plc (NYSE: AON), a leading global professional services firm, today published its Global Catastrophe Recap: First Half 2024 report, which cites a preliminary estimate of more than $117 billion in economic losses from global natural disasters during the first half (1H) of 2024. This figure was lower than the 21st-century 1H average of $137 billion, and significantly lower than the economic losses recorded in 1H 2023 ($226 billion).
Published by Aon's Impact Forecasting team, the report reveals that global insured losses for 1H 2024 were at least $58 billion – above the 21st century 1H average of $39 billion, but lower than in the previous three years, where 1H insured losses exceeded $60 billion by end of June at current price levels. The total number of fatalities from natural catastrophe events was estimated at more than 6,000 during the period – significantly below long-term averages, and the lowest since 2020.
Meanwhile, Aon estimates that the insurance protection gap had reduced to 50 percent, one of the lowest on record for 1H, and largely the result of elevated insurance payouts for U.S. severe convective storm (SCS) damage. Indeed, U.S. natural disasters overall accounted for nearly 80 percent of global insured losses in 1H 2024, reaching nearly $46 billion.
The report highlights that 30 economic loss events exceeded $1 billion during 1H, 22 of which occurred in the U.S., two in South America, four in Asia, and two in EMEA. Japan's Noto earthquake on January 1 was the costliest 1H economic loss event, with more than $17 billion in direct damage. The costliest insured loss event was a period of SCS in the U.S. in March, estimated at $4.7 billion.
Apart from the high prevalence of SCS in the U.S., extensive flooding events in southern Germany, Brazil, the Middle East and China also contributed to the total global economic damage.
"It is great to see a lowering of the global protection gap, which is a result of the high levels of insurance coverage for the SCS events observed in the first half of 2024," said Michal Lörinc, head of Catastrophe Insight at Aon. "However, the re/insurance industry needs to continue its efforts to increase levels of insurance in emerging markets, through provision of not just capital and capacity, but also advanced data and analytics, which help to qualify and quantify the risk, and ultimately shape better decisions."
Andy Marcell, global CEO of Aon's Risk Capital and Reinsurance Solutions, said: "Our Risk Capital experts leverage analytics to bring capital to clients and ensure that the impact of natural catastrophes is spread across the risk transfer chain to protect communities and businesses."
The outlook for 2H 2024 is marked by heightened expectations of a costly hurricane season, as well as continuing SCS activity in the U.S. and Europe. By early July, the second named storm of the season, Hurricane Beryl, already resulted in potentially multi-billion-dollar losses.
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