Natural disasters contributed to £196bn worth of global economic damages in 2020, according to Aon’s weather, climate, and catastrophic insight report.
The figures represented an 8% rise on the century’s annual average costs, as climate change continues to prove an increasingly key factor.
According to the report, 34% of damages were covered by private sector and government-sponsored insurance programmes, resulting in nearly £130bn of uninsured costs.
Greg Case, CEO at Aon, said: “This report highlights the increasing likelihood of ‘connected extremes’ and reinforces that leading organisations of the future will be defined by their ability to manage the global implications of concurrent catastrophic events.
“It has also emphasised the need for enhanced collaboration between the public and private sectors, which will be essential to close the rising protection gap and build resilience against natural catastrophes.”
The National Oceanic and Atmospheric Administration (NOAA) cited 2020 as the second warmest since 1880, with land and ocean temperatures almost one degree higher than the century average.
Tropical cyclones caused the most global damage (£57bn), while flooding and severe convective storms created a combined £102bn of costs.
Steve Bowen, director and meteorologist for impact forecasting at Aon, said: “An increasing number of global regulative bodies are further pivoting towards how to handle emerging transitional and subsequent reputational risks.
“This is especially true as the financial and humanitarian risks surrounding climate-enhanced events become more evident on a daily basis.”