Wildfires and Floods Caused Billion-Dollar Economic Loss in Asia Pacific in the first quarter of 2025: Aon Report

Malay Mail

14-05-2025

Q1 data follows $74B economic loss in Asia Pacific from natural disasters in 2024
Earthquake in Myanmar estimated to be the costliest event of the year so far, with only a fraction insured
Growing Disaster Losses: Global insurance losses in 2024 were 54 percent above the 21st-century average, covering $145B of the $368B in damages. Even though insured losses far exceeded the average, the protection gap stood at 60 percent, representing a significant financial headwind to communities, businesses and governments. In the APAC region, the protection gap was much higher with 95 percent of the losses not covered. Increases in population density in coastal areas, wealth and overall exposure to natural hazards in high-risk areas continue to be a crucial component of growing disaster losses.
Global insurance losses in 2024 were 54 percent above the 21st-century average, covering $145B of the $368B in damages. Even though insured losses far exceeded the average, the protection gap stood at 60 percent, representing a significant financial headwind to communities, businesses and governments. In the APAC region, the protection gap was much higher with 95 percent of the losses not covered. Increases in population density in coastal areas, wealth and overall exposure to natural hazards in high-risk areas continue to be a crucial component of growing disaster losses. Earthquake Risks : April 2024 saw a significant earthquake impact in Taiwan, while Japan experienced the Noto Peninsula earthquake on January 1, 2024. This emphasises the need for ongoing vigilance and preparedness for seismic events.
: April 2024 saw a significant earthquake impact in Taiwan, while Japan experienced the Noto Peninsula earthquake on January 1, 2024. This emphasises the need for ongoing vigilance and preparedness for seismic events. Exposure Changes : Changes in exposure is a growing challenge for insurers and clients. These changes, rather than climate risks alone, are driving shifts in loss patterns. Typhoon Yagi, for example, accentuated the importance of a regional risk management approach that extends beyond sovereign borders.
: Changes in exposure is a growing challenge for insurers and clients. These changes, rather than climate risks alone, are driving shifts in loss patterns. Typhoon Yagi, for example, accentuated the importance of a regional risk management approach that extends beyond sovereign borders. Advances in Flood Modelling : Despite the challenges, advancements in flood modelling have made significant strides in recent years. Advanced tools and data analytics can help businesses and governments understand the complexities of flood risk and prepare for future events.
: Despite the challenges, advancements in flood modelling have made significant strides in recent years. Advanced tools and data analytics can help businesses and governments understand the complexities of flood risk and prepare for future events. Economic Impacts: The exposure of commercial infrastructure to extreme weather has increased, requiring companies and insurers to explore the impact of changing weather patterns on assets. While Typhoon Yagi made a significant impact on economic and insured losses in China, Vietnam and the Philippines, 2024 was a relatively quiet year for natural catastrophes in Asia when compared with the long-term regional trend.
Date
Event
Location
Deaths
Economic Loss
(2024 $ B)
Insured Loss
(2024 $ B)
09/06 -14/07
South Central China Floods
China
470
15.7
0.4
01/09 - 09/09
Typhoon Yagi
China, Southeast Asia
816
12.9
0.7
01/01
Noto Earthquake
Japan
489
18.0
1.5
01/03 – 30/06
India Heatwaves
India
733
NA
NA
20/06 – 30/06
Karachi Heatwave
Pakistan
568
NA
NA
SINGAPORE - Media OutReach Newswire - 14 May 2025 - Aon plc (NYSE: AON), a leading global professional services firm, published Asia Pacific (APAC) insights from its Q1 Global Catastrophe Recap – April 2025 , which analyzes the natural disaster events that occurred worldwide during the first quarter of 2025.During this period, the APAC region experienced significant wildfire activity, particularly in South Korea and Japan. South Korea faced devastating wildfires that resulted in 31 deaths, 49 injuries and the destruction of over 7,700 structures with losses estimated at approximately $1B.The earthquake that occurred in March in Myanmar is the costliest event of the year so far. Damage is expected to reach billions of dollars and only a fraction is covered by insurance. The costliest event for APAC insurers was ex-Tropical Cyclone Alfred, with insured losses of approximately AU $1B.The Q1 data follows Aon's 2025 Climate and Catastrophe Insight report, which identified global natural disaster and climate trends to quantify the risk and human impact of extreme weather events in 2024, where total economic losses in APAC were $74B, with insurance covering only approximately $4B.The main driver of economic losses in 2024 was flooding, with a significant contribution from seasonal floods in China. Two major events: the Noto earthquake in Japan and Typhoon Yagi in Southeast Asia and China also accounted for a large proportion of the losses.Typhoon Yagi was one of the most severe storms to hit Southeast Asia since Typhoon Rammasun in 2014. The storm caused extensive damage across Vietnam, China, Myanmar, the Philippines and Thailand, resulting in significant economic and insured losses. This event highlights the importance of considering both wind and flood risks in typhoon-prone areas.George Attard, CEO for Reinsurance Solutions for APAC at Aon, said: "The devastating earthquake in Myanmar, which caused at least 5,400 deaths and significant structural and infrastructure loss, underscores the importance of being prepared for catastrophe-related risks. Extreme weather and seismic events remain a powerful force driving the complexity and volatility that businesses and communities face and emphasizes the urgent need for innovative mitigation solutions to address this growing challenge."Aon's 2025 Climate and Catastrophe Insight report highlights several trends with natural catastrophe losses:The economic and insured losses in the region also contrast with the global figures, where economic losses from natural disasters in 2024 are estimated at $368B, more than 10 percent above the long-term average since 2000.With greater resilience and mitigation measures in place, global economies can reduce damage and loss of life.In 2024, 18,100 people lost their lives due to natural hazards, mostly from heatwaves and flooding globally. This was below the 21st-century average of 72,400. The long-term decrease in global fatalities can be attributed to improved warning systems, weather forecasts and evacuation planning, underscoring the value of reliable climate data, insights and analytics."Asia is at the forefront of flood modelling," said Peter Cheesman, head of Risk Capital analytics for APAC at Aon. "Despite this, there remains a need for better tools and collaborations with public and private partnerships to help close the insurance gap. A comprehensive, multi-country strategy, together with advanced modelling and data inputs, are critical in helping risk managers prepare for future events as climate and exposure trends continue to evolve."Aon's 2025 Climate and Catastrophe Insight report can be found here Hashtag: #Aon #climaterisks #climate #catastrophe #catastropherisks #flooding
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