Analysis from the Swiss Re Institute highlights that by 2025, about 99.9% of natural catastrophe losses in North America will be caused by secondary disasters such as wildfires and severe convective storms (SCS). Monica Ningen, CEO of Swiss Re U.S. Property & Casualty Re, said that the year is “another clear signal” that the risk landscape is changing and that neither the industry nor communities across the country can treat it as an emergency.
Swiss Re Institute’s latest sigma report analyzes natural catastrophe losses in North America to 2025, showing that secondary catastrophes currently dominate the region’s catastrophe loss pattern.
This means that even in a year without a major U.S. hurricane landfall, insured losses remained high, indicating a higher structural baseline due to more frequent high-impact events, the company said.
The sigma report found that total insured losses will exceed $90 billion by 2025, below levels in recent years but still reflecting rising underlying risks.
Figures show bushfires alone caused a record £40bn of insured losses, while SCS caused £46bn of losses, making 2025 the third costliest year on record for this disaster.
“Together, the two catastrophes resulted in the highest annual total insured losses recorded for secondary catastrophes in the region,” the Swiss Re report noted.
The company continued, “The overall insured loss ratio was unusually high at 71%, reflecting the composition of the event, with wildfires and SCS typically having high insurance penetration in the United States.
“In North America, wildfire losses are growing much faster than economic growth, with high-risk areas increasingly exposed and underlying risk factors on the rise.”
Ningen added, “What’s striking is not just the $90 billion in insured losses across North America, but the fact that secondary hazards such as wildfires and severe convective storms are now causing the vast majority of impacts. These are no longer ‘minor’ in any real sense.”
“What’s driving this trend is a combination of growing exposure and changes in underlying risk. We’re seeing an increasing concentration of assets in high-risk areas, particularly at the wildland-urban interface, while changing weather patterns are also increasing the frequency and severity of events.
“The result is a higher baseline level of losses, even in years that may not appear extreme at first glance. This requires a shift in mindset. These are not isolated shocks but part of the loss environment now expected.”
Ningen concluded: “For insurers, this is more of a need to think about where and how to take risks. That starts with understanding accumulation, but it also means taking real emphasis on mitigation. It’s encouraging to see that adaptation is working.”
“When resilience measures are clear and applied consistently, whether through stricter building standards or better land use decisions, you can see the impact of loss costs over time. The reality is that this only works if everyone plays a role.
“Homeowners, businesses, insurance companies and governments all have a role to play in making communities more resilient, and progress depends on these efforts being coordinated.”