Report: Global Economy Lost $32bn to Natural Disasters in Q1, Only $14bn Insured

Ndubuisi Francis

Preliminary economic losses from natural hazards across the world during the first quarter (Q1) of 2022 totalled $32 billion, of which less than 50 per cent ($14 billion) was covered by public and private insurers, a report published by global data and services analytic company, Aon, said.

Although the first quarter of the year is typically the quietest, Q1 2022 marked the sixth consecutive year to record more than $10 billion in insured losses, said the report titled ‘Global Catastrophe Recap – Q1 2022’.

Some of the most significant natural hazard activity during the quarter occurred in Western and Central Europe windstorms (Dudley/Ylenia, Eunice/Zeynep and Franklin/Antonia), Australia’s east coast floods, the Japan earthquake on March 16, and the severe convective storms (SCS) seen in the United States in March.

The Asia Pacific (APAC) region accounted for the highest percentage of Q1 economic losses at $15-plus billion, followed by the Europe Middle East and Africa (EMEA) at $8 billion and the United States at $6 billion. 

Economic losses or the overall costs of natural catastrophes to economies include the insurance price tag.

Aon explained that these Q1 totals will likely be revised upward, perhaps considerably, in the coming weeks and months, as this type of loss development is standard and expected in the aftermath of larger scale events.

For public and private insurers, the $36 billion in Q1 weather-related insured losses in 2021 and 2022 represented the second-highest two-year total on record – second only to 2020 and 2021, which tallied $40 billion and was primarily driven by the $25 billion of losses seen in Q1 2021, said Aon.

In third place was $33 billion for Q1 events in 1990 (dominated by major European windstorm events) and 1991.
The two-year record for all natural hazards (including earthquakes, tsunamis, etc) remains 2010 and 2011 at $98 billion.

Diving into some of the quarter’s costliest events, Aon said Storm Eunice/Zeynep, which hit during the period February 18-19, was the costliest windstorm to affect the European Union (EU) since 2010, with insurance claims of approximately €4.0 billion ($4.3 billion). 

The UK Met-Office and the Irish National Meteorological Service Met Éireann named the storm Eunice, while the Free University of Berlin named the storm Zeynep). Seventeen lives were lost during Windstorm Eunice.
Eunice/Zeynep was one windstorm in a series during the period February 16-21 that also included: Dudley/Ylenia and and Franklin/Antonia.

The magnitude-7.3 earthquake that shook Japan on March 16 is likely to cost insurers more than $2 billion, with economic losses well into the billions of U.S. dollars, said Aon, recalling that the event occurred just days after the 11th anniversary of the Great Tohoku Earthquake on March 11, 2011.

Damages included ruptured water pipes, disruption to infrastructure such as railway and utility poles. At least 10,414 homes sustained some level of damage.

“The earthquake additionally left several manufacturing facilities closed. Some of these locations included microchip maker Renesas Electronics and electric components maker Murata Manufacturing,” which was expected to further disrupt the current global supply chain crisis, said the Aon report.

The month of March featured numerous SCS outbreaks that resulted in deadly tornadoes, very large hail and strong straight-line winds across the central, eastern and southern United States, said Aon, noting that Iowa, Texas, Mississippi, Louisiana and Alabama were the hardest hit.