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Economic losses from natural disasters cost around $240bn per year

Preliminary results of a catastrophe modeling study show economic losses from major natural disasters over the past 20 years “oscillate around a baseline value of $240bn”. 


19 MARCH 2015 | BY CINTIA CHEONG

The study, carried out by AIR Worldwide, calculated the figure by taking annual losses from major natural disasters during the period 1995-2013 and “normalising” the figures based on today’s conditions around population, wealth, inflation and land use.

Dr Milan Simic, senior vice president of AIR Worldwide, said the study showed there was “little prospect” of reducing the economic losses from natural disasters from the present levels of $240bn a year.

Simic said ongoing development was the reason for the high level of economic losses. “What the study tells us that it is next to impossible to reduce existing levels of economic losses,” he said.

Jerry Velasquez, chief of advocacy and outreach at the United Nations Office for Disaster Risk Reduction, said: “This study tells us that the way we do development is the reason why economic losses are so high. Development drivers are stronger drivers of the increase of risks than hazards themselves. In order to limit economic losses in the future, we need to improve urban planning and make economic growth resilient.” 

The report was due to be discussed at the Third UN World Conference on Disaster Risk Reduction where a new framework for disaster risk reduction was expected to be agreed today.