Major Insured Losses from Natural Disasters in North America – 2025 Update

Editors at Risk & Insurance have curated essential industry content, including white papers, service directories, and conferences tailored for professionals in the risk and insurance sector. Swiss Re's sigma study reveals that insured losses from natural disasters in North America reached $90 billion in 2025, primarily due to wildfires and severe convective storms. Despite being below the five-year average of $97 billion and significantly lower than 2024’s $117 billion, this figure underscores increasing loss baselines driven by evolving exposure and hazard patterns.

In January 2025, southern California wildfires resulted in $40 billion of insured losses, marking the largest wildfire event to date. Severe convective storms added another $46 billion, positioning 2025 as the third-costliest year for these events. With minimal losses from other perils, secondary peril losses constituted 99.9% of the total insurance claims. The high insured share of economic losses at 71% reflects substantial insurance coverage, particularly for U.S. wildfire and storm incidents.

Monica Ningen, CEO of Property & Casualty Reinsurance US at Swiss Re, highlighted the increasing impact of secondary perils, emphasizing their $90 billion contribution to insured losses. The $40 billion in wildfire losses was concentrated in high-value, densely populated wildland-urban interfaces (WUI) in Los Angeles, exacerbated by strong winds. Despite a smaller burned area, the concentration of high-value assets magnifies the threat, illustrating shifting risk landscapes.

Swiss Re’s findings indicate rapid growth in insured wildfire losses, doubling the exposure growth rate over 55 years. Factors like construction cost increases and high wildfire-risk zone population growth accounted for only a third of the loss growth. The rest resulted from changing risk landscapes, including asset concentration in fire-prone areas. Population increases in high-risk zones exceeded national rates threefold since 1975, with WUI exposure growth surpassing non-WUI nationally by a factor of 1.8 and in California by a factor of 1.9.

Severe convective storms resulted in $46 billion in losses, continuing a trend of high annual losses. Billion-dollar loss events rose by 59% from the prior five-year period. Urbanization in high-risk zones and aging infrastructure are key contributors, alongside increasing rooftop solar installations. Although reconstruction costs stabilized since March 2025, they remain elevated compared to 2019, affecting insurance claim expenses.

The sigma report advises that targeted adaptation could mitigate loss growth. In Alabama, the FORTIFIED standard combined with financial incentives significantly reduced insurance claims. Homes adhering to this standard observed notable declines in claims frequency and severity, presenting an effective model for loss prevention. Moreover, the insurance industry is adapting to trends in artificial intelligence and cyber risks, with Allianz's Risk Barometer highlighting these shifts.

In the hospital liability sector, carriers face rising nuclear verdicts exceeding $10 million, with 55 such verdicts totaling $2.5 billion in 2025. Robert Ellis, EVP of Healthcare at Arch Insurance, notes variability in underwriting related to geographical differences. Understanding a hospital's case mix is vital for risk assessment, while proactive claims management and litigation awareness are essential in navigating this challenging market. The hard market persists, underscoring the need for legislative reform and strategic risk management.