Wednesday 22 January 2020 2:27 pm

Natural disasters knock global economy for $232bn hit in 2019

Economic losses from natural disasters topped $232bn in 2019 as the costliest decade on record comes to a close, according to a new report by insurance giant Aon.

There were 409 natural disasters in 2019, 41 of which were responsible for wiping out over a billion dollars each.

The two costliest events were the twin typhoons Hagibis and Faxai, which ravaged Japan in the autumn, and cost $9bn and $6bn respectively, due to damage done to urban areas.

In the decade as a whole, the total cost of natural disasters hit $2.98 trillion, over a trillion more than 2000 – 2009, with insurance payments of $845bn.

Nearly half of the catastrophic weather events – 44 per cent – occurred in the Asia-Pacific region.

In 2019 the insurance sector covered $71bn of the total damage, leaving 69 per cent of the losses uncovered.

Andy Marcell, chief executive of Aon’s reinsurance solutions business, commented: “Following two costly back-to-back years for natural disasters in 2017 and 2018, there were several moderately large catastrophes but strong capitalization has allowed the insurance industry to comfortably manage recent losses.

“However, as socioeconomic patterns further combine with scientific factors such as climate change or extreme weather variability, the potential financial costs at play are only going to increase so building resilience is key.”

Weather-wise, 2019 was the second warmest year on record for land and ocean temperatures since 1851.

Record temperatures of 46 degrees were seen in France and 42.6 degrees in Germany, while the January to May period was the wettest on record in the US, with 15.71 inches of rainfall.

The report comes as wildfires in Australia continue to spread, having already burnt an area roughly the size of Germany.

Steve Bowen, director and meteorologist at Aon’s Impact Forecasting team, commented: “Perhaps the biggest takeaway from the last decade of natural disasters was the emergence of previously considered ‘secondary’ perils – such as wildfire, flood, and drought – becoming much more costly and impactful.

“Scientific research indicates that climate change will continue to affect all types of weather phenomena and subsequently impact increasingly urbanized areas.”