2018 extreme weather caused $215 billion in economic losses

2018 extreme weather caused $215 billion in economic losses

By Elisa Jiménez Alonso

Aon’s latest Weather, Climate & Catastrophe Insight – 2018 Annual Report shows that the top 10 global economic loss events were all weather-related with the costliest being Hurricane Michael at $17 billion. The costliest event in terms of insured losses was the November Camp Fire racking up a bill of $12 billion. The total cost of weather-related disasters in 2018 was $215 billion out of the $225 billion total caused by all disasters (including earthquakes).

Top 10 Global Economic Loss Events. Source: Aon.
Top 10 Global Insured Loss Events. Source: Aon.

2017 and 2018 are the costliest back-to-back years for weather-related disasters on record, causing a total of $653 billion in economic losses. $237 billion of those losses were insured making 2017 and 2018 the most expensive back-to-back years for public and private insurers. 2018 was also the 4th costliest year on record for weather-related events with $89 billion of insured losses.

Overall, there were 42 billion-dollar disasters of which 39 were weather-related, 16 of those happened in the United States. Of the 18 billion-dollar insured loss events in 2018 all were weather-related and 13 of those events occurred in the United States. In the 21st century so far, tropical cyclones and severe convective storms represented 59% of global insured losses driven mainly by events taking place in the United States.

Aggregate Insured Loss by Peril Since 2000. Source: Aon.

The deadliest weather-related event were the Monsoon floods in India that led to 1,424 deaths, it sits in second place after the earthquake and tsunami that hit Indonesia in September and killed 2,256 people. Floods accounted for 36% of worldwide fatalities closely followed by earthquakes, which caused 31%. With 10,300 deaths, 2018 ranks among the 12 years with the lowest disaster-related fatality totals since 1950.

Top 10 Human Fatality Events. Source: Aon.

However, the geographic distribution of the numbers of economic losses versus human fatalities still tells a story of severe social inequality. Whereas most of the economic losses happened in wealthy nations such as the United States, Europe, and Japan, the vast majority of deaths (79%) occurred in the Asia-Pacific region. About 1.2 billion people in the Asia-Pacific region live in poverty which greatly impacts their vulnerability, especially when combined with the exposure of the region to extreme weather.

Click here to download the full report.

Executive summary infographic of Aon’s Weather, Climate & Catastrophe Insight. Source: Aon.

Cover photo by Coast Guard News/Flickr (CC BY-NC-ND 2.0): Coast Guard crews provide assistance post-Hurricane Michael in Mexico Beach, Florida, Oct. 14, 2018. The Coast Guard is working with local, state and federal partners for Hurricane Michael post-storm response across northwest Florida. (U.S. Coast Guard photo by Petty Officer 3rd Class Hunter Medley)

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