Global Natural Catastrophe Insured Losses Hit $80B in Early 2025

Global insured losses from natural catastrophes reached $80 billion in the first half of 2025, nearly doubling the 10-year average and surpassing half of the $150 billion projected for the entire year, according to Swiss Re Institute. This highlights ongoing challenges for insurers and reinsurers in managing escalating weather-related risks, particularly in regions with high exposure.

The largest loss event was January's wildfires in Los Angeles County, which caused an estimated $40 billion in insured damages, making it the costliest insured wildfire event recorded. These fires were driven by an extended Santa Ana wind season and drought, destroying over 16,000 structures in high-value residential areas. Wildfire losses have increased significantly due to growth in the wildland-urban interface (WUI) and climate stress, with wildfire claims now representing 7% of natural catastrophe losses compared to just 1% before 2015. Severe convective storms, including hail, high winds, and tornadoes, contributed $31 billion in insured losses, reflecting the impact of urbanization and rising asset values in hazard-prone areas. These storms remain a significant factor in U.S. catastrophe claims, with rising rebuilding costs expected to increase losses further. Other notable events include a magnitude 7.7 earthquake in Myanmar with $1.5 billion in insured losses in Thailand, European heatwaves triggering wildfires, and severe flash flooding in Texas.

 As the U.S. shifts focus to the Atlantic hurricane season, forecasts anticipate a near- to above-average season with three to five major hurricanes, emphasizing the ongoing risk from major storms along the Gulf and Atlantic coasts. Swiss Re stresses the importance of pre-event mitigation strategies such as flood protection infrastructure, which are significantly more cost-effective than post-event rebuilding.

Reinsurers play a dual role by absorbing peak risks and supporting forward-looking risk management solutions, underscoring the need for collaboration between insurers, reinsurers, and policymakers. Insurance professionals are encouraged to monitor these evolving risks closely, especially as the second half of the year typically accounts for 60% of annual catastrophe losses, potentially pushing 2025 figures beyond current projections.