Climate change could amplify the impact of earthquakes in regions with specific soil compositions and projected increases in rainfall, according to new research from Aon’s Reinsurance Solutions unit.
The firm’s preliminary analysis indicates that seismic hazard may double in areas characterized by stiff or soft soils, which are susceptible to reduced strength under increased saturation levels. These conditions are projected to affect more than 30% of the global landmass by 2100, with a particular emphasis on countries in the Asia-Pacific region.
Aon’s modeling group, Impact Forecasting, has introduced a new loss assessment framework to support further research into the interactions between climate-related variables and seismic activity. The company said this initiative is part of a broader effort to reduce the global earthquake protection gap, which currently stands at more than 70% – the highest among natural catastrophes.
The framework was tested using soil and seismic data from Singapore. At locations with silty and clay-rich soils and baseline saturation levels of 20% to 30%, Aon estimated that earthquake-related losses could rise by 10% to 15% under the RCP4.5 climate scenario by the year 2100.
The firm noted that losses could increase further in areas with exposure to flexible construction types, such as high-rise buildings or light industrial structures. The modeling also showed that the contribution of liquefaction to total losses could double under these projected conditions.
Aon’s findings were informed by Singapore’s geotechnical profile and seismic exposure, which is primarily driven by distant seismic sources such as the Sumatran subduction zone. Although the results are location-specific, Aon indicated that the methodology serves as a proof of concept with implications for other regions facing similar soil and seismic profiles.
These findings align with Aon’s broader observations across the Asia-Pacific market, where the firm has reported a persistent protection gap in reinsurance. According to Aon’s catastrophe analysis, only 9% of total economic losses from natural disasters in the APAC region were insured.
To strengthen the model’s predictive value, Aon stressed the need for high-resolution hydro-geotechnical data to calibrate the framework further. Enhancing the model’s ability to estimate risk at the local level is expected to improve accuracy in both hazard mapping and future loss distribution under climate stress scenarios.
These developments come against the backdrop of rising catastrophe losses globally. Aon reported that total insured losses from natural catastrophes exceeded $100 billion in 2024, continuing a multi-year trend where annual totals have surpassed that threshold.
Aon noted that the reinsurance sector can take an active role in mitigating these emerging risks by incorporating climate-sensitive parameters into catastrophe modeling. According to the firm, new modeling approaches could include updated soil saturation maps reflecting both seasonal and long-term climate trends, as well as multi-peril frameworks capable of accounting for cascading hazards such as landslides triggered by both shaking and precipitation.
In its broader recommendations, Aon suggested that insurers could support coverage development tailored to specific secondary perils, potentially incorporating climate-related components into earthquake insurance products.
The firm also emphasized the potential of public-private partnerships to improve affordability and availability of coverage in high-risk regions, especially in parts of APAC where protection gaps remain substantial.
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