Extreme heat is also emerging as one of Asia Pacific’s most consequential climate risks, with rising temperatures placing increasing strain on public health systems, infrastructure and workforce productivity, Across the region, working hours lost to heat stress have more than doubled over the past three decades, particularly in labour intensive sectors such as construction, agriculture and manufacturing,cautioned the report.
Singapore:The economic losses from natural disasters in APAC region reached at least $76 billion with only around 10 per cent, just over $7 billion, being insured in 2025.
The losses have been driven largely by the devastating Myanmar earthquake, widespread flooding in China and South and southeast Asia, and a series of high-impact cyclones, according to a report by global re/insurance broker Aon.
This gap is becoming more pronounced as climatedriven hazards increase in frequency, severity and geographic reach, said the report.
Aon released its Asia Pacific (APAC) insights from its 2026 Climate and Catastrophe Insight report, examining how earthquakes, extreme heat, flooding and tropical cyclones are shaping economic, human and operational risk across the region.
While overall economic losses were below longterm averages, the human impact remained significant, highlighting the disruption that natural hazards can cause even in years with lower overall catastrophe activity, stressed the report.
The 7.7magnitude earthquake in Myanmar, which killed nearly 5,500 people was the deadliest natural disaster globally in 2025 since the 2023 Turkey-Syria earthquake and accounted for more than 20 per cent of APAC’s total economic losses. Flooding events across China, India, Pakistan and southeast Asia caused widespread damage to homes, infrastructure and agriculture, while multiple highimpact cyclones led to significant displacement and loss of life, highlighted the report.
Extreme heat is also emerging as one of Asia Pacific’s most consequential climate risks, with rising temperatures placing increasing strain on public health systems, infrastructure and workforce productivity, Across the region, working hours lost to heat stress have more than doubled over the past three decades, particularly in labour intensive sectors such as construction, agriculture and manufacturing,cautioned the report.
“APAC is facing a convergence of climate risks that are no longer isolated or seasonal.From floods to heat and cyclones, the impacts are becoming more complex and disruptive. When earthquake risk is added to the mix, even years with below-average catastrophe activity can have profound consequences for people, businesses and governments,”,” said Rupert Moore, CEO of Reinsurance Solutions, APAC for Aon.
Aon’s 2026 Climate and Catastrophe Insight report highlights the importance of integrated resilience strategies that combine physical risk mitigation, forwardlooking climate analytics and innovative risk transfer solutions,Moore added.
“These approaches can help organisations and governments better anticipate emerging risks, protect vulnerable populations and sustain economic growth, particularly as
private capital plays a growing role in helping to address the protection gap,” he opined.
Across APAC, climatedriven risks remain significantly underinsured, especially at the corporate and infrastructure level, said Cecilia Tse, director, risk, climate and sustainability, APAC for Aon.
“Flooding, cyclones, extreme heat and similar climate risks increasingly overlap, stretching the limits of traditional insurance programmes and leaving corporates exposed to earnings volatility and supply chain disruption. Closing protection gaps, strengthening infrastructure and protecting people will be critical for businesses as climate volatility becomes a defining feature of the region’s risk landscape,” added Tse.
Key insights include:
-The costliest event of the year was the Myanmar earthquake, which caused nearly $16 billion in economic losses and $1.6 billion in insured losses.
-At least 15 events in APAC resulted in economic losses exceeding $1 billion, though only three – ex-cyclone Alfred, the Myanmar earthquake and a major hailstorm in Australia generated insured losses above $1 billion.
-Industry losses in Australia and New Zealand totalled approximately $3.4 billion, close to the decadal average.
-In Japan, economic losses from natural disasters exceeded $700 million, with insured losses of about $290 million, resulting in the protection gap of about 59 percent.
-The APAC region continue to face significant protection gaps for earthquake, flood and other secondary perils versus Europe and the U.S.; in 2025, the U.S. recorded $141 billion in economic losses with $103 billion insured, and Europe, Middle East and Africa (EMEA) recorded $21 billion in economic losses and about $12 billion insured.
-In 2025, global natural disasters generated approximately $260 billion in economic losses, while insured losses reached only $127 billion, highlighting persistent underinsurance.