Global Economic Damage from Natural Disasters to Reach $450 Billion Annually

The global economic damage from natural disasters is expected to reach approximately $450 billion on average per year, with more than half of these losses not covered by insurance companies. About 62% of global losses from natural disasters remain uninsured, leading to annual uninsured losses for homeowners, businesses, and governments amounting to nearly $279 billion. The main causes of the increase in losses include climate change, rapid urbanization, and rising construction costs. Insured global losses have exceeded $100 billion for the sixth consecutive year amid widespread wildfires and severe storms. Insurance companies are revising contract terms, excluding coverage for floods and storms, while major insurers like State Farm and AIG are withdrawing policies in high-risk areas such as California and the Florida coast. Low coverage in developing countries also exacerbates the situation, as demonstrated by the earthquake in Myanmar in March 2025, which caused $12 billion in damages, with insurers compensating less than $100 million. As a result, private insurers are retreating from risky zones, increasing the financial burden on government aid programs and taxpayers.

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