U.S. Drives $107 Billion Global Insured Losses from Natural Disasters in 2025

The Swiss Re Institute projects that annual global insured losses from natural catastrophes will reach $107 billion in 2025, with the United States bearing the majority of the impact. The U.S. market accounts for approximately 83% of these losses, predominantly driven by the Los Angeles-area wildfires and severe convective storms in various parts of the country. This figure continues a trend of over $100 billion in insured losses annually for six consecutive years, prompting increased focus on underwriting discipline, premium adjustments, and risk modeling precision within the insurance industry. A significant portion of the 2025 losses stemmed from the Palisades Fire in Southern California, which destroyed homes and businesses over 23,000 acres and resulted in $40 billion in insured damages, marking it as the costliest wildfire event globally on record. These rising natural catastrophe losses underscore challenges insurers face regarding exposure management in high-risk regions, leading to contraction of coverage and coverage gaps in vulnerable U.S. communities. The report highlights the expanding financial pressure on insurers and reinsurers to not only serve as financial shock absorbers but also support initiatives toward resilient infrastructures and risk-informed policies to mitigate future losses. Severe convective storm losses globally surged to $50 billion in 2025, ranking this year as the third-costliest on record, after 2023 and 2024. Conversely, hurricane-related insured losses were unusually low due to a lack of landfalling storms on U.S. coasts during an active season, which moderated overall expected losses. Compared to earlier forecasts by Swiss Re estimating $150 billion in insured losses, actual losses fell short despite the elevated levels. The persistence of high insured losses related to natural catastrophes is prompting the insurance sector to reassess underwriting strategies and resilience investments. Market participants are facing sustained pressure from increasing risk exposures exacerbated by extreme weather events, necessitating advancements in catastrophe risk modeling and updated pricing frameworks. Overall, the report signals ongoing shifts in the U.S. property and casualty insurance landscape, particularly in managing wildfire and severe storm risks. Insurers must balance risk retention with reinsurer partnerships while navigating regulatory expectations for financial stability and resilience financing. Continued monitoring of exposure trends and enhanced risk mitigation strategies remain key priorities as climate-related natural catastrophe losses become a normalized element of underwriting considerations.