Economic losses from natural disasters in APAC reached at least $76bn in 2025, driven largely by the devastating Myanmar earthquake, widespread flooding in China and South and southeast Asia, and a series of high-impact cyclones.
According to Asia Pacific (APAC) insights from Aon’s "2026 Climate and Catastrophe Insight" report, earthquakes, extreme heat, flooding and tropical cyclones are shaping economic, human and operational risk across the region.
Of the total economic losses from natural disasters in APAC, only around 10%, just over $7bn, were insured. This gap is becoming more pronounced as climate-driven hazards increase in frequency, severity and geographic reach.
Aon CEO of Reinsurance Solutions APAC Rupert Moore said, “APAC is facing a convergence of climate risks that are no longer isolated or seasonal. From floods to heat and cyclones, the impacts are becoming more complex and disruptive. When earthquake risk is added to the mix, even years with below-average catastrophe activity can have profound consequences for people, businesses and governments.
“Aon’s 2026 Climate and Catastrophe Insight report highlights the importance of integrated resilience strategies that combine physical risk mitigation, forward looking climate analytics and innovative risk transfer solutions. These approaches can help organisations and governments better anticipate emerging risks, protect vulnerable populations and sustain economic growth, particularly as private capital plays a growing role in helping to address the protection gap,” said Mr Moore.
Across APAC, climate-driven risks remain significantly underinsured, especially at the corporate and infrastructure level, said Ms Cecilia Tse, Director, Risk, Climate and Sustainability, APAC.
Ms Tse said, “Flooding, cyclones, extreme heat and similar climate risks increasingly overlap, stretching the limits of traditional insurance programmes and leaving corporates exposed to earnings volatility and supply chain disruption. Closing protection gaps, strengthening infrastructure and protecting people will be critical for businesses as climate volatility becomes a defining feature of the region’s risk landscape.”
Aon CEO Greg Case, in his foreword to the 94-page report, said, “Climate science indicates the impact of weather risks on the economy and society will only intensify, meaning businesses must adapt to a world increasingly shaped by weather volatility in order to become more resilient and grow.”
To respond effectively to these weather challenges, business leaders must:
- Embed adaptation into their people and location strategies.
- Invest in early warning systems and predictive analytics.
- Foster cross-functional approaches to weather risk.
The report lists the 7.7 magnitude earthquake in Myanmar, which killed nearly 5,500 people as the deadliest natural disaster globally in 2025 since the 2023 Turkey-Syria earthquake and accounted for more than 20% of APAC’s total economic losses.
Flooding events across China, India, Pakistan and southeast Asia caused widespread damage to homes, infrastructure and agriculture, while multiple high-impact cyclones led to significant displacement and loss of life. While overall economic losses were below long-term averages, the human impact remained significant, highlighting the disruption that natural hazards can cause even in years with lower overall catastrophe activity.
Extreme heat is also emerging as one of Asia Pacific’s most consequential climate risks, with rising temperatures placing increasing strain on public health systems, infrastructure and workforce productivity. Across the region, working hours lost to heat stress have more than doubled over the past three decades, particularly in labour-intensive sectors such as construction, agriculture and manufacturing.