LONDON, January 30, 2025 — As 2024 becomes the first year to exceed 1.5°C warming above pre-industrial levels, the insurance protection gap for natural catastrophes is estimated to stand at 60%, according to WTW’s Natural Catastrophe Review (July – December 2024). published today by WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company.
Natural catastrophes continued to put strain on global insurance markets. Global insured losses surpassed $140 billion in 2024, marking the fifth consecutive year insured damages exceeded $100 billion. Total economic damages surpassed $350 billion, once again highlighting the inadequacy in resilience to climate-related risks. Adding to this pressure, wildfires in Los Angeles have already driven insurance loss estimates in the region of $30-$40 billion in the first few weeks of 2025.
The Natural Catastrophe Review is a biannual publication that delves into the physical, vulnerability and socioeconomic factors that contributed to the largest natural catastrophes in the second half of 2024 and goes beyond the numbers to provide new perspectives to help with natural catastrophe risk management and resilience across multiple sectors.
Other key points to note:
- Unprecedented natural catastrophes: Major events in 2024 included Spain's costliest natural catastrophe (the Valencia floods causing €3.7 billion in claims), the highest insurance claims on record for natural catastrophes in Canada ($5.6 billion), hurricanes Helene and Milton, which made landfall in Florida (combined $45 billion) and the deadliest Western Pacific typhoon season since 2013.
- Climate-driven risks: 2024 became the first year on record to exceed 1.5°C above pre-industrial levels, a significant milestone. 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, including hurricanes Helene and Milton, the South American drought, and Storm Boris, which impacted Europe.
- Call to action on resilience: The review emphasizes the need for enhanced risk modeling, innovative insurance solutions and proactive adaptation and mitigate measure to address the growing impacts of climate change on economies and societies.
Hélène Galy, Head of WTW Research Network said: “Our long-standing collaboration with scientists gives us better insights into growing exposure to perils, especially perils that are changing rapidly. It’s easy to be lured by the increased sophistication of risk models: a deeper understanding of data and science are critical to identify real improvements and remaining limitations of risk models, to make them more useful to decision-makers.”
