Earthquakes in Turkey and Syria cause nearly half of the economic losses from global disasters in the first half of 2023: Aoun

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The global insured losses were the fourth highest on record at $53 billion, boosted by convective storms in the United States.

LONDON, July 20, 2023 /PRNewswire/ — Aon plc (NYSE: AON), a leading global professional services firm, today published Global Disaster Compendium: First Half (H1) of 2023, revealing a preliminary estimate of economic losses from global natural disasters at $194 billion. Notably, this is higher than the first-half average of $128 billion for the 21st century, the fifth-highest on record and the highest since 2011.

The earthquakes that struck Turkey and Syria during the first quarter of 2023 were responsible for nearly half of the total economic losses estimated at $91 billion. This event has also become the deadliest global disaster since 2010 and the costliest in recent history for both countries. As a result, economic losses in the EMEA region were unprecedented at $111 billion, far surpassing the previous first-half record of $71 billion in 1990.

The event demonstrated that regulation and enforcement of modern building codes are of paramount importance in preventing material losses and deaths. Despite the strict and modern building codes currently in force in Turkey, structural integrity and performance varied in the affected areas. Many of the collapsed buildings were built relatively recently, with many total collapses of newly built multi-storey apartment buildings.

“Despite the fact that communities globally remain at risk from disasters, only about 27 percent of economic losses have been insured this year. These devastating events reinforce the importance of resilience and risk mitigation – such as the imposition of building codes, highlighted by the earthquakes in Turkey and Syria,” said Michel Lorink, president of Disaster Insight. “As we continue to confront interconnected risks, we focus on scaling up risk mitigation and helping organizations make better decisions to close the global protection gap and enrich lives around the world.”

While the earthquake event was the most costly from an insurance perspective, severe heat storm (SCS) activity in the United States dominated global losses during the period. In the first half of 2023, the US SCS business was responsible for at least 13 individual multi-billion dollar events and $35 billion in total primary insured losses, setting a new 1H record.

Additional highlights of the report include:

Two consecutive billion-dollar disasters affected New Zealand’s North Island over a three-week period in the first quarter of 2023: the remnants of Hurricane Gabriel and severe flooding in Auckland. These events are ranked 5th and 6th costliest for insured losses in New Zealand overall, surpassed only by the 2010, 2011 and 2016 earthquakes. Protracted wildfire activity across several Canadian provinces has burned more than 10 million hectares of land, and thick plumes of smoke generated hazardous weather conditions with potentially significant health impacts for tens of millions of people across North America. While some populated areas were affected by economic losses in the hundreds of millions – notably in the suburbs of Halifax, Nova Scotia due to the Tantallon Great Fire – the vast majority of fires did not cause significant physical damage to property. This year’s economic losses of $194 billion make up 60 percent of the global average annual total. Global insured losses from natural disasters in the first half of 2023 were $53 billion, a 46 percent increase over the 21st century average. Disaster costs continued to be affected by inflationary pressures, which continue to persist in many parts of the world, as well as other societal factors including demographics and wealth distribution which remain a major driver of financial loss. Notable heatwaves have occurred around the world, with global sea surface temperatures extremely hot: temperatures recorded this year were higher than in any previous year since 1981. In the first half of the year, some regions saw water temperatures up to 5˚C, or 9˚F, higher than normal. This trend continues in the second half of the year.

Access the recap of Aon’s Global Catastrophe: First Half of 2023 here. More information about Aon’s climate solutions for insurers is available here and resources to address climate change and sustainability are available here.

About AonAon plc (NYSE: AON) exists to shape decisions for the better – to protect and enrich the lives of people around the world. Our colleagues in more than 120 countries and territories provide our clients with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their businesses.

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