Archive: April 2, 2024

Natural Catastrophes Caused USD 65 Billion Economic Loss in Asia Pacific in 2023, Aon reports

SINGAPORE –  2 April 2024 – Aon plc (NYSE: AON), a leading global professional services firm, today published Asia Pacific insights from its 2024 Climate and Catastrophe Report, which identifies natural disaster and climate trends both globally and for Asia Pacific, to help businesses make better decisions to manage volatility and enhance resilience.

The report reveals that 398 natural disaster events occurred globally in 2023, resulting in a USD 380 billion (2022: USD 355 billion) economic loss during the 12-month period under review – 22 percent above the 21st-century average – driven by significant earthquakes and relentless severe convective storms (SCS) in the U.S. and Europe.

Economic losses in the Asia Pacific region specifically, driven primarily by floods in China and drought in India, reached USD 65 billion – 48 percent lower than the 21st-century average. Meanwhile, the ‘protection gap’ – the proportion of total losses that were uninsured – for Asia Pacific stood at 91 percent, with only 9 percent of losses, or USD 6 billion, of economic losses covered by insurance. This is below the 21st-century average of USD 15 billion, highlighting the urgency to expand insurance protection in the region.

George Attard, CEO of Reinsurance Solutions for Aon’s Asia Pacific region, said: “The findings from Aon’s 2023 Global Risk Management Survey for Asia Pacific demonstrate that although climate change is not featured in the top ten, it directly impacts four of the top ten risks for businesses, that is business interruption, rapidly changing market trends, supply/chain distribution failure and regulatory or legislative changes. With climate driving new extreme weather records, businesses increasingly need to quantify and address the direct and indirect impact of climate risk. Businesses must therefore leverage advanced analytics and experts to help analyse climate trends and make better decisions to address risks and increase the resiliency of their operations, workforces and the communities they impact.”

Flooding remains a recurring threat

The 2024 Climate and Catastrophe Insight report reveals that flooding remained a recurring threat in Asia Pacific, with annual losses having exceeded USD 30 billion every year since 2010. Flood losses overall proved to be the costliest peril for the fourth consecutive year, accounting for more than 64 percent of the loss total in 2023. About half of the Asia Pacific losses were related to flooding in China, which resulted in more than USD 32 billion economic losses and USD 1.4 billion of insured losses. Many places saw significant flooding and record rainfall events in 2023, including Hong Kong, South Korea, India, and Pakistan. The South Asia floods (Pakistan and India) resulted in nearly 2,900 fatalities. Much of the impact stemmed from regions where insurance penetration is very low.

Areas with high populations are generally better equipped for natural disasters through investment and potentially higher insurance take-up, but the flipside is that the significant urban growth can lead to unforeseen risks, especially when it comes to unprecedented weather events. In Hong Kong for example, typhoons are expected, and the associated risks are well understood. However, the 2023 rainfall-induced flash flooding was beyond average levels, exposing significant protection gaps.

With economic losses of nearly USD 13 billion and insured losses of USD 1.4 billion, tropical cyclone losses for Asia and Oceania were 53 percent, and 70 percent below their 21st-century averages. The number of fatalities from tropical cyclones stood relatively low for the second year in a row. This might be a result of improved disaster response and adaptation measures; however, many communities remain vulnerable in countries such as Myanmar, where at least 463 people died due to the impact of Cyclone Mocha in May.

Increasing number of events

The Asia Pacific region was rocked by several large earthquakes in 2023. Nearly 1,500 people were killed after a series of earthquakes in Afghanistan’s Herat Province in October, and more than 200,000 homes were damaged in China’s Gansu Province in December. Extreme heat was another unexpected peril in the Asian region in 2023. Parts of the region experienced prolonged periods of extreme temperatures in 2023. China endured a new national heat record with the temperature soaring to 52.2°C in July.

Notably, a multi-week-long heatwave impacted many countries in South and Southeastern Asia in April and May. Additional losses in billions of dollars resulted from drought conditions that affected China and India particularly.

Brad Weir, head of analytics of Reinsurance Solutions in Asia for Aon, said: “The 2024 Climate and Catastrophe Insight report highlights the vulnerability of the region to disasters and how the lack of insurance exacerbates business risks. With climate variability we see natural hazards impacting areas that in recent times may have been largely unaffected, meaning those communities are generally under-prepared and may not have adequate insurance in place. Closing the protection gap will therefore continue to pose a challenge but also a huge opportunity for Asia Pacific. There is a growing need for advanced climate modelling and risk assessment analytics for better disaster preparedness and planning to reduce risk, protect lives and promote resilience.”

The top 10 Asia Pacific economic loss events in 2023 were:

The top 10 global economic loss events in 2023 were:

With efforts to limit global warming, business and investors can consider climate change from three perspectives: protecting their portfolios against financial risks; benefiting from growth opportunities in climate solutions; and determining how to have a positive impact and play a role in a world moving to net-zero.

AD Ports Group Issues 2023 Annual Report

Abu Dhabi, UAE – 1 April 2024: AD Ports Group (ADX: ADPORTS), a leading facilitator of global trade, logistics, and industry, today issued its 2023 Annual Report.

The report highlights significant achievements for the Group that expanded its international footprint significantly in 2023, particularly following the integration of Noatum, a global logistics platform with a presence in 27 countries and a leader in automotive logistics services in Europe. Moreover, a series of ports, terminals, maritime and shipping agreements in Jordan, Egypt, Pakistan, Republic of Congo, Kazakhstan and Uzbekistan, supported doubling the Group’s revenue and extended its global reach to 46 countries.

AD Ports Group’s vertically integrated businesses Clusters, including Ports, Economic Cities & Free Zones, Maritime & Shipping, Logistics, and Digital, have enabled the Group to become one of the fastest-growing enablers of trade, industry and logistics, whose integrated synergistic businesses are dedicated to leading the future of global trade with innovative, end-to-end supply chain solutions, world-class infrastructure, and smart new routes for a changing world.

Commenting on the report, H.E. Falah Al Ahbabi, Chairman of AD Ports Group, said: “Through bold, value enhancing acquisitions, and strategic expansions in the Arabian Gulf, Red Sea, Caspian Sea, Africa, and around the world, AD Ports Group in 2023 transformed into a world-class facilitator of global trade and logistics, in line with the economic diversification objectives set by the UAE’s visionary leadership. In a year of rising global market uncertainty, the Group’s record revenue and profits underlined, once again, its resilience and core strength, as well as its value to shareholders.”

Capt. Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group, said: “2023 was one of the most dynamic periods of growth in the history of AD Ports Group. We expanded our maritime, shipping and ports footprint into Jordan, Egypt, Pakistan, the Republic of the Congo, Uzbekistan, and Kazakhstan, and in addition we transformed our logistics business by acquiring Noatum, an integrated provider active in 27 countries and a leading in the automotive logistics sector in Europe.”

He added: “Moving forward into 2024, we plan to continue in delivering value to our customers, shareholders and the communities we serve. With the guidance of the UAE’s wise leadership, our strategic focus will be to leverage our cutting-edge infrastructure and advanced fleet, for further dynamic growth both regionally and internationally.”

Strategic Direction

The Group’s growth strategy is underscored by a prudent and risk-aware approach, leveraging its stable revenue streams and favourable macroeconomic conditions to drive expansion. This multifaceted strategy combines the operational enhancement of current assets with strategic mergers and acquisitions both within the domestic market and internationally.

Central to this strategy is the Group’s aim to strengthen its presence in Abu Dhabi and the UAE, whilst pursuing targeted growth in the regional market, and establish a significant global footprint in the logistics and trade services sector.

The Group’s focussed inorganic growth strategy focuses on strategic investments to proactively pursue opportunistic complementary, synergetic, and value-added investments in logistics, maritime & shipping, and port assets. This will drive enhanced customer relationships, expand the Group’s logistics network, and bolster its Abu Dhabi-based operations, ensuring these opportunities align with its criteria of scale, management quality, and financial attractiveness.

With this strategy supported by robust financial foundation and a portfolio of high-quality assets, the Group is well-positioned for resilient growth across varying economic and industry cycles.

Market Overview

The global shipping industry experienced a year of mixed fortunes in 2023, with a return to normalised shipping rates across various segments, despite uneven supply-demand dynamics. While the tanker, offshore, bulk, and Ro-Ro segments enjoyed a positive year, bolstered by China’s reopening and a 3% increase in global trade volumes, the container market faced challenges, with rates softening due to a gradual regularisation of supply chains post-COVID-19 and an increase in vessel fleet supply.

Despite these disparities, the industry on average remained 33% above its 10-year trend, with energy shipping and the offshore segment experiencing strong performance – Ro-Ro rates hit all-time highs and bulkers recovered in the fourth quarter. The container segment, however, saw better performance in trade lanes related to AD Ports Group, while main East-West routes were deeply affected.

Looking ahead, the shipping and logistics sectors are set to continue evolving in response to the post-pandemic shift from “just-in-time” to “just-in-case” strategies, driven by new trade and investment policies, national security considerations, and the move towards regionalisation and localisation of supply chains. This shift, alongside the rapid digitalisation of the logistics sector, is expected to improve trade efficiency and future-proof supply chains. AD Ports Group, with its diversified port-centric logistics footprint, is well-positioned to capitalise on these trends, offering strong support for the re- and nearshoring of supply chains through its global assets.

Furthermore, the recent Red Sea disruptions are anticipated to further impact volumes and rates in 2024, highlighting the importance of regional feeder services and the strategic positioning of AD Ports Group in navigating the challenges and opportunities in today’s volatile market.

AD Ports Group annual report details some of the major achievements, as well as acquisitions and agreements signed in 2023, that have extended the Group’s global reach.

The year began with the inauguration of the Aqaba Cruise Terminal, the first-of-its-kind facility in Jordan and concluded with the signing of a definitive 30-year concession agreement with the Red Sea Ports Authority (“RSPA”) for the development and operation of a multi-purpose terminal at Safaga Sea Port, a strategic location on the Red Sea coast of Egypt.

A key milestone in the Group’s international expansion strategy was the landmark 100% acquisition of Noatum, a global integrated logistics services provider with presence across all major global markets and trade lanes.

As part of the Group’s Africa Strategy and commitment to strategic development within emerging markets, it signed a 30-year extendable concession agreement to manage and operate a multipurpose terminal in Congo’s Pointe Noire Port.

AD Ports Group’s focus on replicating the company’s integrated business model in regions that offer long-term and sustainable growth prospects, was reflected in the signing of a 50-Year concession agreement with Karachi Port Trust for the development of a state-of-the-art container terminal. This is aimed at driving growth, promote trade diversification, and strengthen bilateral ties between the UAE and Pakistan.

Additionally, in response to the growing demands of the global offshore oil and gas market, 10 vessels were purchased that will bolster offshore operations in the Middle East and Southeast Asia. The year also saw a significant collaboration with Kazakhstan’s national shipping company, KazMorTransFlot (KMTF), leading to the acquisition of two advanced vessels for transporting Kazakhstan’s oil across the Caspian Sea. Today, the Group operates over 250 vessels across all service lines.

Financial highlights for 2023 included a revenue growth of 112% year-on-year to AED 11.7 billion. Results for the 12 months ending 31st December 2023 reported strong operational and financial performance with EBITDA increasing 23% YoY to AED 2.67 billion and total Net Profit reaching AED 1.4 billion in 2023, up 6% YoY.