After three consecutive years (2018-2020) of economic losses topping $100bn from Nat CAT events, the toll in Asia Pacific (APAC) fell to $78bn in 2021. This was 31% below the 2000-2020 average ($113bn) on an inflation-adjusted basis, says Aon, a global professional services firm that provides risk, reinsurance, retirement, and health solutions.
In its report, ‘2021 Weather, Climate and Catastrophe Insight’, Aon noted that the region’s below-average losses were mainly due to the relatively quiet tropical cyclone season in the western Pacific Ocean and slightly lower flood-related costs. The absence of El Nino conditions helped suppress losses from wildfire and drought.
Insurers in APAC recorded aggregated losses of $9.4bn, which was 31% below the 21st century average and 57% below the decadal average. The protection gap remained a challenging issue in APAC as insurance covered just 12% of the economic losses in the region.
Flood events account for more than 55% of the economic losses in 2021. For the second consecutive year, seasonal flood losses in China topped $30bn, as Henan experienced record-breaking rainfall. These floods in Zhengzhou Province became China’s costliest individual weather event for the Chinese insurance industry on record.
According to the report, 2021 saw a total of $343bn in economic losses worldwide, $329bn of which resulted from weather and climate-related events, making last year the third costliest year on record after adjusting for inflation. While losses were up from 2020, the number of notable disaster events slightly decreased, demonstrating the heightened costliness and severity of these events. Of the 2021 losses, only 38% were covered by insurance. Despite an increase in overall losses from 2020, the protection gap of economic losses not covered by insurance decreased from 63% to 62% in 2021. A