Asia's protection gap leaves $59b uncovered – Aon

Losses from natural disasters left the region 48% lower than the 21st century average.

Economic losses from natural disasters in Asia Pacific reached $65b in 2023, primarily due to floods in China and drought in India. However, only 9% of these losses were covered by insurance, highlighting a significant protection gap in the region, Aon said in a report.

Brad Weir, head of analytics of Reinsurance Solutions in Asia for Aon, emphasised the need for advanced climate modelling and risk assessment analytics to improve disaster preparedness and planning in the region. 

“Closing the protection gap will therefore continue to pose a challenge but also a huge opportunity for Asia Pacific. There is a growing need for advanced climate modelling and risk assessment analytics for better disaster preparedness and planning to reduce risk, protect lives and promote resilience.” Weir said in a press release.

The region’s loss was also 48% lower than the 21st-century average. Meanwhile, global natural disaster events in 2023 saw 398 natural disaster events occur, resulting in a total economic loss of $380b, up 7.0% from 2022. 

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This was driven by significant earthquakes and severe convective storms in the U.S. and Europe.

Flooding remained a recurring threat in the Asia Pacific region, with annual losses exceeding $30b since 2010. Flood losses accounted for over 64% of the total loss in 2023, with significant impacts in China, Hong Kong, South Korea, India, and Pakistan.

Economic losses from tropical cyclones were below their 21st-century averages in Asia and Oceania in 2023, with relatively low numbers of fatalities. However, vulnerable communities, particularly in countries like Myanmar, remain at risk.

The region also experienced large earthquakes, extreme heat, and drought conditions in 2023, highlighting the diverse range of natural hazards.