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The difference between economic and insured losses caused by a natural catastrophe — the "protection gap" — illustrates both society's need for protection and (re)insurers' potential for growth. Examination of economic and insured losses reveals how wide the protection gap is and how sizable losses are for societies after a catastrophe, which can inform risk mitigation, public risk financing, and emergency management to enhance global resilience and better prepare society for the ultimate costs.

However, this cost is ultimately borne by both governments and individuals, and continually threatens the resilience and economic well-being of developing nations. Even in the United States, where insurance penetration is typically high, flood and earthquake risk are severely underinsured.

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