Global economic losses from natural disasters in 2024 reached significant levels, with certain regions experiencing insured losses well above historical averages, according to Aon Reinsurance Solutions.
While the United States saw economic losses surpass US$200 billion for only the third time since 2000, Canada recorded its costliest year for the re/insurance sector. Meanwhile, flooding was the primary driver of losses in the EMEA region, and Asia-Pacific recorded lower-than-average losses but continued to experience a significant protection gap.
Economic losses from natural disasters in the US reached US$218 billion in 2024, more than double the historical average of US$109 billion for the 21st century. This marks the third time since 2000 that losses have exceeded the US$200 billion threshold.
Public and private insurers covered approximately half of the total economic loss, with insured losses reaching US$113 billion. This figure is significantly above the 21st-century average of US$58 billion and the median of US$45 billion.
A review from Twelve Capital highlighted that the 2024 Atlantic hurricane season, initially forecasted to be highly active, underscored the unpredictable nature of catastrophe losses across re/insurance.
In its report, Aon Reinsurance Solutions noted that extreme weather events, including severe convective storms, hurricanes, and wildfires, contributed to the high loss totals. Insurers continued to face increased exposure to climate-related risks, with secondary perils playing a growing role in the overall financial impact.
Economic losses from natural disasters in the Americas outside the US totaled at least US$25 billion, which remained below the long-term average. However, insured losses in the region reached approximately US$9 billion, driven largely by multiple high-impact events in Canada.
According to Aon Reinsurance Solutions, 2024 was the most expensive year on record for the Canadian (re)insurance sector. Between July and August, four major events resulted in a combined insured loss of CA$7.7 billion (US$5.6 billion).
These included flooding in southern Ontario, the Jasper Fire in British Columbia, flooding in Quebec caused by remnants of Hurricane Debby, and a severe hailstorm in Calgary on Aug. 5. The frequency and severity of these disasters placed increased pressure on insurers managing catastrophe risk in the region.
Total economic losses in Europe, the Middle East, and Africa (EMEA) exceeded US$50 billion, aligning closely with the long-term average for the region. Insurers covered approximately US$19 billion of those losses, a total significantly above the historical mean.
Compared to 2023, catastrophe-related losses declined, as the previous year was impacted by the Turkey-Syria earthquake.
Flooding accounted for the largest share of losses in the EMEA region, generating at least US$36 billion in economic damage and US$12 billion in insured losses. Aon Reinsurance Solutions identified three key flooding events in Europe.
One of the most notable was the severe flooding in southern Germany in early June, which resulted in €4.1 billion (US$4.5 billion) in economic losses and an estimated insurance impact of €2.0 billion (US$2.2 billion). The recurring impact of flood-related losses continues to highlight challenges for insurers managing exposure to climate-driven risks in the region.
In the Asia-Pacific region, catastrophe-related economic losses totaled at least US$74 billion in 2024, falling below historical averages. However, insured losses accounted for only US$4 billion, reflecting the ongoing protection gap in the region. Aon Reinsurance Solutions reported that flooding was the main driver of economic losses, with seasonal floods in China contributing significantly to the total.
Two major events also contributed to financial losses in the region: the Noto earthquake in Japan and Typhoon Yagi, which impacted China and Southeast Asia. Despite the lower-than-average losses in 2024, the region continues to face challenges related to underinsurance, with significant portions of economic losses remaining uninsured.
Aon Reinsurance Solutions emphasized that the 2024 catastrophe loss landscape underscored the increasing role of secondary perils, such as flooding and severe convective storms, in shaping insurer exposure.
While insured losses in certain regions exceeded historical trends, protection gaps in regions like Asia-Pacific continue to limit the ability of insurers to cover economic losses fully. As catastrophe activity continues to evolve, insurers and reinsurers are likely to reassess their pricing models, risk appetites, and capital allocations in response to shifting climate and economic conditions.
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