A new report from Swiss Re shows that although global insured losses of $107 billion in 2025 are below long-term natural catastrophe trends, secondary catastrophes including wildfires, severe convective storms (SCS) and floods account for a record 92% of total losses.
The Los Angeles wildfires at the beginning of the year contributed US$40 billion to the 2025 total and were the largest insured wildfire loss event in Swiss Re’s sigma record.
Severe convective storms also had a significant impact in 2025, making it the third costliest year on record in the South China Sea after 2023 and 2024, adding $51 billion to total global insured losses.
By comparison, flood-related insured losses in 2025 are well below average, at $3.4 billion, compared with an average of $15.4 billion in the previous five years.
The report also highlighted that 2025 was a notable year with no major hurricane landfalls in the United States.
Even so, global long-term insured losses from natural catastrophes continue to grow at an annual rate of 5% to 7%, underscoring the need for continued adaptation and risk mitigation to maintain insurability and close protection gaps.
Balz Grollimund, head of catastrophe risk, added: “Natural catastrophe losses below trend levels in 2025 are the result of favorable changes rather than underlying risk mitigation.
“If losses return to normal long-term levels, losses would total $148 billion in 2026. Under our modeled peak loss scenario, insured losses could even climb to about $320 billion in 2026.
“As risk exposure continues to increase, the upward trend in insured losses is structural and it is critical to identify the risk drivers behind it to manage and reduce risk before losses occur.”
Urs Baertschi, CEO of Property & Casualty Re, commented: “Peak loss scenario years could be more than double recent annual natural catastrophe insured losses and exceed $300 billion.
“Further risk awareness, adaptation and mitigation, along with adequate insurance and reinsurance, play a vital role in social resilience. We protect against peak 2/3 risks by absorbing low-frequency, high-severity events that can quickly turn a quiet year into a year of record losses.”
Jérôme Jean Haegeli, President of the Swiss Re Institute and Group Chief Economist, said: “Most of the increase in long-term losses comes from a simple reality: more valuable properties are being built in dangerous ways, while reconstruction costs have risen.
“At the same time, Sigma analysis shows that, for some hazards and regions, hazards and vulnerabilities evolve faster than individual exposures would suggest. Sustained and well-designed adaptation and risk mitigation measures are therefore increasingly decisive to keep insurance viable and affordable, and reduce the global protection gap represented by underinsurance.”
Total global economic losses from natural disasters will reach $220 billion by 2025, about 49% of which are insured, the highest proportion recorded by sigma, which is reported to be a “clear indication” that the insurance industry is playing a role in closing the global protection gap.
“However, protection gaps remain particularly large in emerging economies, where 80-90% of catastrophe losses are typically not covered by insurance, highlighting the need to combine stronger adaptation and risk management with broader and more accessible insurance coverage,” the Swiss Re report concluded.
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