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Risk Central
Digital EditionQ1 2024 Global Disasters Cause $45B in Economic Losses
The first quarter of 2024 witnessed several notable disaster events worldwide that drove total economic losses above $45 billion, according to an analysis of global catastrophes by Aon.
While that figure is lower than the 21st-century Q1 average of $59 billion and significantly lower than the losses in the first quarter of 2023 ($149 billion), it still represents a substantial impact on the global economy. The costliest event of the quarter was the Noto earthquake in Japan on Jan. 1, resulting in economic losses of $17.6 billion, according to governmental estimates.
“The number of billion-dollar events was 12, eight of which occurred in the United States, two in South America, and two in Asia,” the Aon report stated. “It is worth noting that these numbers are subject to change as individual event loss estimates tend to evolve even months after the date of occurrence.”
Insured losses in the first quarter reached at least $17 billion, slightly above average, with major loss drivers including severe convective and winter storms in the United States, windstorms and flooding in Europe, and the Noto earthquake in Japan. The insurance protection gap for the quarter’s catastrophe losses is estimated at 64%, the report noted.
From a regional perspective, the Asia-Pacific (APAC) region accounted for the largest portion of global economic losses, largely driven by the Noto event. In contrast, the Europe, Middle East, and Africa (EMEA) region recorded significantly lower losses compared to 2023, which saw the devastating earthquakes in Turkey and Syria. The Americas experienced losses close to average, with the largest losses stemming from the ongoing drought in Brazil. In the United States, losses were comparable to previous years and mainly driven by severe convective storms.
In the United States, severe convective storms, winter weather, and flooding generated insured losses of nearly $13 billion, Aon reported. This was well above the 21st-century average of nearly $7 billion for the first three months of the year, but less than 2023’s Q1 toll of more than $19 billion in in insured losses, the report said.
The costliest event was a widespread large hail and violent tornado outbreak in mid-March, with estimated losses of $3.4 billion. Additionally, wildfires in Texas and Oklahoma burned more than triple the 10-year average of acres, with the Smokehouse Creek Fire becoming the largest wildfire in Texas history and causing significant losses.
The United States also experienced a deadly winter weather event across a dozen states and cold air outbreak in mid-January, claiming over 70 lives and becoming one of the deadliest winter weather events in the country in the 21st century. However, it remained well below the devastating deep freeze event in February 2021, which resulted in more than 200 deaths and a widespread electric grid failure across Texas.
Globally, several regions experienced historic and record-setting high air temperatures during Q1, exacerbating drought conditions and wildfire development. South America and Africa had their warmest and second-warmest January-March period on record, while parts of Australia were severely affected by prolonged heatwaves. The United States and much of Europe also experienced substantial above-average temperatures during their winter period.
Looking ahead to the 2024 North Atlantic hurricane season, Aon noted that forecasts suggest a very active season, with an average of 11 expected hurricanes. The timing of a shift to La Niña conditions is seen as a critical factor for storm formation, as it could create more conducive conditions and reduce wind shear.
Historical data shows that hurricanes have caused insured losses of more than $200 billion during La Niña conditions since 1950, while significantly lower losses ($80 billion) have been incurred in El Niño phases.
As the world continues to face the challenges posed by natural disasters and climate anomalies, the insurance industry must remain vigilant and adapt to the evolving risk landscape. The losses experienced in Q1 2024 serve as a stark reminder of the importance of comprehensive risk management strategies and the need for increased resilience in the face of future catastrophic events.
To obtain the full report, visit Aon’s website. &
