NATURAL disasters in the Asia-Pacific region caused economic losses of US$80 billion in 2022, said insurance broker Aon. Of this amount, only US$11 billion was covered by insurance.

In a new report released on Tuesday (Jun 27), Aon estimated economic losses were 35 per cent lower than the average and 21 per cent below the median of the 21st century.

Though notably lower than the average insured losses of US$15 billion, there is still a “substantial” protection gap of 86 per cent, it noted.

The report found that losses caused by floods remained the costliest threat for the third consecutive year, accounting for more than 61 per cent of the region’s total loss. Flooding has also resulted in annual losses of more than US$30 billion annually since 2010.

The places which saw record rain and significant flooding in 2022 include Pakistan, India, southern China and South Korea.

Notably, floods in South Asia, where insurance penetration remains “very low”, have resulted in US$19 billion economic losses. Meanwhile, flooding in China contributed another US$16 billion in economic losses.

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Aon said some 52 million people in China were affected and 7.6 million people needed livelihood assistance due to the drought.

Meanwhile in Australia, widespread flooding has resulted in US$8 billion in economic losses and US$4 billion in insured losses, making it the most expensive event for the local insurance sector on record after adjusting for inflation.

In Pakistan, extended summers and the La Nina phenomenon have resulted in much of the Indian subcontinent receiving above-average precipitation levels, causing widespread flooding. Nationwide rainfall from July to September was also 175 per cent above average, Aon said, citing the Pakistan Meteorological Department.

Aon estimated 1,739 lives were lost in Pakistan’s monsoon floods and over 33 million people were affected. It noted that the country has been experiencing the aftermath of floods, including acute malnutrition or waterborne diseases such as typhoid, diarrhoea and malaria.

Tropical cyclone losses for Asia and Oceania were 75 per cent and 91 per cent below their 21st century averages, respectively – contributing to the relatively low natural disaster losses for 2022.

Aon estimated that about 31,300 people lost their lives due to global natural disasters in 2022, with Apac accounting for about 4,000 deaths.

While tropical cyclones resulted in the lowest number of fatalities in at least 66 years, the region recorded nearly 2,000 deaths caused by earthquakes. The region was hit by several large earthquakes in Afghanistan, Pakistan, Indonesia, China, the Philippines and Japan in 2022.

On a global level, natural disasters are estimated to have caused US$313 billion in economic losses, based on the report, while global insured losses stood at US$132 billion.