The Economic Impact of Natural Disasters

On September 30, the coastal city of Bogo in the Philippines was hit by a 6.9-magnitude earthquake that caused at least 72 casualties and left 294 people injured. This is the deadliest earthquake the country has experienced since October 2013, when 200 people had lost their lives following a 7.2-magnitude quake. In addition to the terrible human impact of natural disasters, there is also a heavy financial impact: the recent earthquake in Bogo was strong enough to cause buildings to collapse and destroy much of the local infrastructure.

As the following chart shows, many natural disasters have caused damage costing more than a hundred billion dollars. According to data compiled by risk consulting firm Aon, the 2011 earthquake off the Pacific coast of Tōhoku, which triggered the tsunami that caused the Fukushima nuclear accident, is the most costly natural disaster in history, with damages estimated at $235 billion. Hurricane Katrina, which hit New Orleans in August 2005, causing the death of 1,392 people, and Hurricane Harvey, which devastated Texas and Louisiana in 2017, are tied in second place, having each caused an estimated $125 billion in damages.