Natural catastrophe events in 2020 caused economic losses of £197bn

In 2020, 416 natural catastrophe events resulted in economic losses of £197bn, which was 8% up on the annual average since 2000, according to Aon.

The broker released the findings in its global “Weather, Climate & Catastrophe Insight: 2020 Annual Report”.

Aon said the private sector and government-sponsored insurance programmes covered £71 billion of the losses, creating a protection gap of 64%. This means a total of £125bn was not covered by insurance.

Greg Case, CEO of Aon, said: “The global response to the socioeconomic volatility caused by the COVID-19 pandemic has increased focus on other systemic risks – particularly climate change – and is causing a fundamental reordering of business priorities.

“This report highlights the increasing likelihood of 'connected extremes' and reinforces that leading organizations of the future will be defined by their ability to manage the global implications of concurrent catastrophic events.”

During the year, more than 8,000 people lost their lives due to natural catastrophes. Tropical cyclone was the costliest peril, causing more than £57bn in direct economic damage. It was closely followed by flooding £56bn and severe convective storm £46bn.

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