a day ago
- Business
- New Straits Times
AI could save up to US$70bil a year in disaster losses by 2050: Deloitte
KUALA LUMPUR: Artificial intelligence (AI) has the potential to help global leaders build stronger, more resilient infrastructure to better anticipate, manage, and recover from increasingly frequent and severe natural disasters, potentially avoiding up to US$70 billion in annual infrastructure losses by 2050, according to a Deloitte report.
The report estimates that average yearly losses from natural disasters could rise to between US$460 billion and over US$500 billion by 2050, with storms and floods making up the largest share of these losses.
Deloitte said that embedding AI into infrastructure planning and operations can enhance prevention, detection, and response capabilities, allowing both public and private sector leaders to proactively manage and reduce disaster-related risks.
"If deployed strategically, AI can help leaders identify risks sooner, optimise resources, prevent costly failures and disruption, and accelerate response and recovery times during natural disasters. Investing in both preventative and reactive AI-powered infrastructure solutions can help safeguard economic value and increase business resilience," said Jennifer Steinmann, Deloitte global sustainability business leader.
Adopting AI technologies, from infrastructure planning through operations, can offer preventative, detective, and responsive solutions to help address natural disasters, providing private and public sector leaders options to proactively mitigate these risks.
The benefits are significant. Deloitte Global's report found that AI can help prevent damages of US$30 billion on average per year from storms alone globally by 2050. AI-powered detection and reaction systems, like early warning systems, can reduce risks from wildfires and floods.
For example, early bushfire detection can help mitigate losses of between US$100 million and US$300 million annually in Australia, depending on detection and reaction times.
Deloitte said although AI offers significant potential to boost the resilience of critical infrastructure, leaders must collaborate to overcome barriers to adoption, including outdated infrastructure, regulatory shortcomings, and financial limitations.
Coordinating among stakeholders worldwide to develop AI tools that complement other resilience measures is crucial for driving innovation and building a more robust future, said Costi Perricos, Deloitte's global generative AI business leader.
"With broader adoption and improved AI capabilities, projected annual savings in direct disaster costs by 2050 could reach as much as US$115 billion, potentially eliminating nearly one-third of disaster-related losses.
"This research demonstrates the clear economic, environmental, and societal value AI can provide, and leaders should take action to help ensure minimal disruption."
