Increasing catastrophes, inflation and construction costs are driving the continued rise in insured losses, Verisk’s 2026 Global Modelled Catastrophe Losses Report finds.
According to the annual report, the insurance industry should be prepared to withstand $171 billion in insured catastrophe losses on average in a given year, up $19 billion from a year ago, and the highest estimate Verisk has reported to date.
Driven by the ongoing global expansion in property and insured values, this benchmark rose despite a year with no US hurricane landfalls for the first time in a decade.
Rob Newbold, president of Verisk Catastrophe and Risk Solutions, said: “A quiet hurricane season can lead markets to respond as if risk has eased: rates soften, insurers keep more risk on their own books, and more capital competes to write new business.
“But 2025 reminds us that the underlying risk landscape has changed and years without significant losses from U.S. hurricane activity no longer signal a quieter catastrophe environment.”
Global insured catastrophe losses exceeded $100 billion for the sixth consecutive year, driven not by severity perils like earthquakes and hurricanes, but by record-setting wildfires and significant severe thunderstorm activity.
These frequency perils generate widespread hail, wind and tornado damage across many communities instead of causing a single catastrophic event.
“A more dynamic risk environment underscores how catastrophe models help insurers maintain underwriting discipline and make informed pricing, capital allocation and risk transfer decisions based on the full range of risk, not just the outcome of a single season,” Newbold added.
Verisk’s global insured average annual loss (AAL) of $171 billion, serves as a long-term catastrophe risk benchmark rather than a single-year forecast.
The report highlights that the United States drives the majority of this risk, accounting for 68%, $117 billion, of the global total. By peril, severe thunderstorms account for 40%, more than any other peril, followed by tropical cyclone at 27%, earthquake 10%, winter storm 9%, flood 7%, and wildfire 6%.
The pattern held in 2025, when frequency perils, rather than a single hurricane, drove industry losses, Verisk noted.
Extreme loss scenarios significantly exceeded the average, with modelled aggregate insured losses reaching $477 billion for a 100-year event and $606 billion for a 250-year event.
Since 2012, this estimated global AAL has nearly tripled from $59 billion, driven by rising insured exposure, broader geographic model coverage, and updated catastrophe modelling methods.
The rising risk is heavily driven by macroeconomic and demographic forces rather than just the number or severity of storms, wildfires or earthquakes in a given year, the report highlights.
This includes growth in property exposure, as Verisk has found that in modelled territories, this has expanded by roughly 7% annually since 2021 due to new construction and rising asset valuations.
Additionally, the cost of rebuilding keeps increasing. In the US, residential repair and rebuild costs have climbed approximately 5% per year since 2021, outpacing consumer inflation and increasing the potential cost of catastrophe losses even when hazard activity remains unchanged.
Moreover, more people and property are concentrated in hazard-prone areas. In England, 7.1% of single-family homes sit in a 100-year flood plain, and 1 in 9 homes built between 2022 and 2024 was placed in flood-prone a flood-risk area — a share Verisk’s models project could rise to one in seven new houses by 2050.
“Together, these trends increase insured catastrophe losses independently of weather patterns and help explain why the industry’s risk benchmark continues to rise,” Verisk stated.
For the sixth consecutive year, global insured catastrophe losses surpassed $100 billion, with 2025 losses settling between $107 billion and $129 billion due to wildfires and thunderstorms.
Verisk’s analysis warns that adding major US landfalling hurricanes to a typical convective storm year could easily push annual industry losses to $200 billion.
For policyholders, these compounding pressures indicate tighter underwriting standards and upward pressure premiums in exposed corridors.
Dr. Jay Guin, executive vice president and chief research officer for Verisk Catastrophe and Risk Solutions, commented: “The $171 billion figure is not determined by the outcome of one hurricane season or one year of catastrophe losses.
“It reflects a wide distribution of potential events across perils and regions, using current exposure data and a view of hazard grounded in the near-present climate. That broader perspective helps the industry prepare for loss scenarios that historical experience alone may not reveal.”
The report also highlighted a persistent and uneven protection gap. Across the globe, only 38% of economic losses resulting from natural disasters are insured, against a modelled economic AAL exceeding $450 billion.
In Europe, just 22%, $24 billion, of the $110 billion in annual expected economic losses is covered, according to the report.
Protection gaps were equally stark in major 2025 events: during the deadly July 2025 Central Texas flash floods, the regional take-up rates hovered around 3%, while a $12 billion earthquake in Myanmar in March 2025 saw less than $100 million in insured payouts.
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