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Report | WTW Research Network Newsletter

WTW Natural Catastrophe Review 2024

January 28, 2025

This edition presents insights and lessons learned from major natural disasters in the second half of 2024, explores key themes of the year, and offers an outlook for early 2025.
Climate|Environmental Risks|natural-catastrophe|Risk and Analytics|Willis Research Network
Climate Risk and Resilience

Welcome to the latest edition of WTW’s Natural Catastrophe Review, a biannual publication that brings insights from our experts, including WTW’s Research Network, to examine recent natural disasters, lessons learned and emerging trends.

This edition delves into the physical, vulnerability and socioeconomic factors that contributed to the largest natural catastrophes in the second half of 2024 (Figure 1) and examines the overarching themes of the year. Offering a smarter way to risk, this report goes beyond the numbers to provide new perspectives to help with natural catastrophe risk management and resilience across multiple sectors.

The spotlight on climate change intensified in 2024 as the global mean temperature exceeded 1.5°C above pre-industrial levels for the first time. The year saw an array of weather-related catastrophes, many of which were influenced by the effects of a warming planet. Global insured losses exceeded $140 billion, marking the fifth consecutive year above $100 billion. Meanwhile, the protection gap remained substantial, with total economic damages exceeding $350 billion, highlighting the inadequacy in resilience to climate-related risks.

a table showing prominent natural catastrophes July to December 2024 in chrolonological order.
Figure 1. Prominent natural catastrophes July – December discussed in this Natural Catastrophe Review

Storms, flooding and drought shape 2024

In the second half of 2024, hurricanes Helene and Milton caused significant destruction, with combined insurance claims of over $40 billion (Section 3.1). Meanwhile, in the western North Pacific, Super Typhoon Yagi ranked among the 10 costliest storms on record, with economic losses of over $15 billion across Southeast Asia and South China (Section 3.7). U.S. severe convective storms continued their recent trend of elevated damages, with total insured losses exceeding $50 billion for the second year in a row (Section 3.2). And Canada saw its costliest year on record for natural catastrophes as hailstorms, floods and wildfires led to insured damages totaling $5.6 billion (Section 3.6).

Globally, flooding caused significant disruption. Europe endured one of its worst years on record for flood-related damages. In Spain, devastating floods swept through Valencia, resulting in $3.7 billion in insurance claims, marking the country's costliest natural catastrophe on record (Section 3.4). Storm Boris brought extreme rainfall and flooding to Central and Eastern Europe, with claims totaling $2.2 billion (Section 3.3). In South Asia, intense monsoon rains affected millions, disrupting key sectors such as agriculture, energy and manufacturing (Section 3.9). These events followed several severe floods in the first half of 2024, including in the United Arab Emirates, Brazil, China and Germany.[1]

While many regions were overwhelmed by water, large parts of South America faced the opposite extreme — a catastrophic drought that severely impacted key sectors, including agriculture, energy and transportation — highlighting the interconnected nature of climate-related risks (Section 3.8).

2024 becomes the first year to exceed 1.5°C

In 2024, the annual global mean temperature exceeded 1.5°C above pre-industrial levels for the first time, averaging 1.55°C above the 1850–1900 baseline,[2] according to the World Meteorological Organization (Figure 2). This milestone marks the threshold identified in the 2015 Paris Agreement as critical for avoiding the most severe impacts of climate change. It follows another record-breaking year in 2023, which reached 1.48°C above pre-industrial levels.[1]

Bar chart showing anomaly in global surface temperatures relative to 1850-1900 baseline
Figure 2. Annual global surface temperature anomaly relative to a pre-industrial baseline (1850 – 1900).

Data source: ERA5.

However, the Paris Agreement’s target refers to long-term average temperatures, meaning a single year exceeding this threshold does not constitute a permanent breach. Nonetheless, the latest temperature data highlight the rapid rate at which the Earth is warming. All of the past 10 years now rank in the top 10 warmest on record.

A key contributor to the record-high temperatures in both 2023 and 2024 was El Niño, which peaked in December 2023 but continued to influence global temperatures during the first half of 2024. By May 2024, neutral El Niño-Southern Oscillation conditions had developed, with sea surface temperatures gradually returning to near-average levels in the Central and Eastern Pacific. Despite this transition, many other regions experienced persistently high sea surface temperatures (SSTs), contributing to the average SST outside the polar regions reaching record levels in 2024 (0.51°C above the 1991 – 2020 average, according to the Copernicus Climate Change Service).

A total of 20 heat records were broken across sovereign states and territories in 2024, with Mexico and Egypt experiencing the most extreme temperatures, reaching 52.0°C and 50.9°C, respectively. Research from the WTW Research Network, led by Dr. James Done at the U.S. National Center for Atmospheric Research, reveals that 2024's heat records reflect a broader trend: Extreme heat events in cities have quadrupled in frequency over the past 40 years, with heat waves now lasting twice as long in some regions. These extreme heat events highlight the growing effects of climate change on health, infrastructure and ecosystems, with extreme heat now responsible for approximately 500,000 heat-related deaths annually worldwide.

The growing influence of climate change

The mounting financial impact of natural catastrophes continues to be driven by the expansion in both the number and value of assets at risk. However, climate change is also playing an increasingly prominent role, with several events in 2024 being linked to human-caused warming. Rapid attribution has become a critical tool in understanding these connections. Scientists, including those at the World Weather Attribution project, can quickly assess the extent to which climate change has influenced the likelihood or intensity of specific events.

In 2024, rapid attribution studies provided a number of insights into how climate change influenced the year’s weather events. Researchers found that exceptionally warm SSTs in the Gulf of Mexico were 200 to 500 times more likely along Hurricane Helene's path and 400 to 800 times more likely along Hurricane Milton's path due to human-induced climate change. In Central and Eastern Europe, the rainfall from Storm Boris was determined to be 10% more intense and twice as likely because of climate change. Similarly, the severe drought in South America was found to be 30 times more likely as a result of human-caused warming.

These findings highlight the ongoing need to address climate risks through both mitigation and adaptation measures. This includes investing in protective infrastructure, such as flood defenses, and ensuring adequate insurance coverage to close the protection gap and strengthen financial resilience.

Interconnected and compounding risks

As climate change intensifies, we are also seeing an increase in interconnected and compounding risks across multiple sectors. For instance, the 2024 drought in South America, driven by El Niño and climate change, disrupted energy, transportation, agriculture and businesses simultaneously (Section 3.8). Businesses reliant on electricity, water supplies and transportation — such as those in manufacturing and food processing — faced significant operational challenges, as these interlinked disruptions compounded the economic impact of the drought. Another example of interconnected risks is the growing threat of dam failures as infrastructure ages and rainfall extremes increase. In 2024, several dam failures occurred across the globe, many triggered by heavy rainfall, leading to flooding that disrupted local populations and economies (Section 3.5). These examples highlight how climate-related events can lead to multifaceted and often amplified impacts, necessitating integrated, cross-sectoral approaches to resilience and risk management.

Outlook

The Outlook section of this edition explores several key themes shaping the future of risk management and resilience. The first theme focuses on how predictive science and models support decision making amid uncertainty. In 2024, questions about the accuracy of North Atlantic hurricane forecasts emerged during a mid-season lull in storminess. In response, WTW Research Network partner Dr. Erica Thomson examines the utility and limitations of pre-season hurricane forecasts for decision making (Section 4.1). Section 4.2 then turns to earthquakes, exploring the potential of foreshocks to predict impending large seismic events in the context of Japan’s first “megaquake” warning. On the topic of resilience in climate mitigation, Section 4.3 considers the role of insurance in safeguarding carbon markets after the 2024 California Park Fire. Finally, Section 4.4 delves into the evolving landscape of climate litigation, highlighting how increasing accountability and reporting requirements are driving legal risks for organizations.

References

  1. WTW Natural Catastrophe Review January – June 2024. Return to article
  2. Press Release | WMO confirms 2024 as warmest year on record at about 1.55°C above pre-industrial level. Return to article
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