Asia suffered $72b weather and catastrophe-related losses in 2021

Insurance only covered around 9% of the economic losses.

Asia suffered $72b in weather and catastrophe-related losses in 2021 with only 9% covered by insurance, according to Aon’s 2021 Weather, Climate and Catastrophe Insight report.

The report said that flooding throughout Asia was the primary driver of disaster-related fatalities during the year, further accentuated by the trend of urbanisation, leading to higher population density.

Flash flooding in Henan in July led to an economic loss of $18.6 billion, and a record-breaking $1.9b in covered losses, the costliest weather-related event for the Chinese insurance industry.

Meanwhile, Super Typhoon Rai was the deadliest tropical cyclone of the year. Its landfall in late December left 409 people dead in the Philippines and one in Vietnam. Rai became the third-costliest typhoon on record in the Philippines. The costliest tropical cyclone in Asia was India’s Cyclone Yaas, with almost $3b in economic losses.

According to Owen Belman, head of Asia at Aon, there is clearly a protection and innovation gap when it comes to climate risk.

“As catastrophic events increase in severity, the way that we assess and ultimately prepare for these risks cannot depend solely on historical data. We need to look to artificial intelligence and predictive models that are constantly learning and evolving to map the volatility of a changing climate and its interaction with a complex and ever-changing urban environment. With scalable solutions, organisations can make better decisions that make them more resilient as they continue to face interconnected and increasingly volatile risks,” Belman said.