Verisk Reports $152B Global Annual Catastrophe Loss, Frequency Perils Intensify

Verisk's 2025 Global Modeled Catastrophe Losses Report highlights a significant increase in the global modeled insured average annual property loss (AAL) from natural catastrophes, now reaching $152 billion. This reflects a $32 billion rise from 2024 and underscores a persistent upward trend in catastrophe-related losses driven by inflation, urban expansion, and changing climate conditions. Insurers and reinsurers are urged to adjust strategies accordingly to address these evolving risks.

The report reveals that frequency perils—such as severe thunderstorms, winter storms, wildfires, and inland flooding—account for two thirds ($98 billion) of the total modeled AAL. These more frequent but often high-impact events now pose double the financial threat compared to larger, less frequent catastrophes like tropical cyclones and earthquakes.

Verisk has updated and expanded its catastrophe models, introducing new inland flood models for regions including Malaysia, Indonesia, and Ireland, and refining models for Australia’s bushfires, Mexico’s earthquakes, UK floods, US severe thunderstorms, and South Korea’s typhoons. Notably, the Verisk Wildfire Model became the first to meet California’s new PRID framework, supporting insurance availability in wildfire-prone areas.

The report stresses the importance of utilizing forward-looking, scientifically robust catastrophe models that account for current environmental and societal factors. These models facilitate more accurate benchmarking of potential losses and help insurance professionals enhance catastrophe risk management and underwriting decisions.

Serving over 120 countries, Verisk Extreme Event Solutions provides comprehensive analytics, software, and consulting services addressing not only natural catastrophes but also man-made risks such as terrorism and extreme casualty events. The suite supports insurance, reinsurance, financial, corporate, and government clients in building resilience and making informed risk decisions.

Overall, Verisk’s findings emphasize a fundamental shift in the catastrophe risk landscape, where frequency perils are driving sustained, high-impact losses, calling for adaptive strategies within the insurance industry. This shift challenges traditional risk assessment approaches and stresses the need for ongoing model innovation to align with evolving risk realities.