In the United States, Hurricane Ian left a path of destruction in Florida and the Carolinas after making landfall last week as a powerful Category 4 storm. The death toll continues to rise, surpassing 100 in Florida as of Oct. 4 as search and rescue efforts remain ongoing.
According to John Dickson, president of Aon Edge, “We can’t stop cyclone events or stop the rain from falling, but we can build communities that are able to withstand these events. We need to think about more resilient structure, and we need to make a plan to handle the water and move it away from our people, families and property.” Read more in USA Today for insights on how Hurricane Ian’s damage prompts the need for better catastrophe planning in the future.
As natural catastrophes increase in frequency and severity, their resulting losses increase as well. Communities with higher levels of insurance tend to recover more quickly from disasters. But insurance can only go so far. Closing the protection gap – [the difference in between the total economic loss and the amount covered by insurance] demands an “all-hands-on-deck approach,” linking insurance with governments, public policy and other sources of risk-taking capital. Read more about the protection gap in Aon’s The One Brief.
Hurricane Ian threatens heavy losses for catastrophe bond holders, with macro-economic factors such as inflation predicted to exacerbate insured losses. Recent articles in Bloomberg and Business Insurance provide insights from Aon on how rising global temperatures, extreme weather and inflation are impacting catastrophe losses.
According to Paul Andersen, executive managing director, U.S. property growth leader at Aon, “We’ve seen an increase in cat losses over the last five years, what everyone’s working through right now is where additional capacity will come from...and Ian will add a little challenge along the way.”