Reinsurance broker Gallagher Re has estimated that total insured catastrophe losses for the opening quarter of 2026 reached at least US$20 billion, 26% lower than the decadal average of $26 billion, and 47% below the most recent 5-year average.The broker’s Q1 2026 natural catastrophe and climate report also revealed that economic losses from all natural perils in Q1’26 reached at least $58 billion, around 12% below the 10-year Q1 average.According to the broker, the below average loss totals are largely due to a later start to US severe convective storm activity as well as the absence of more billion-dollar industry events.The report also highlighted how within the opening quarter there was a minimum of 17-billion-dollar economic loss events globally; of which only five were deemed billion-dollar insured loss events through March.

As per Gallagher Re, the largest event of Q1’26 was the late January North American winter storm which had significant impacts in more than two dozen states as well as southern Canada.The storm complex and accompanying Arctic blast reportedly generated at least $4 billion in insured losses between January 21st to 26th, ranking as the fourth-costliest US winter weather event in the modern record.Gallagher Re’s report highlighted how during the first three months of 2026, there were several global natural catastrophe events that had significant societal impacts; however, these did not result in unusually high economic or insured losses.

“A relatively low and manageable number of high-cost Nat Cat events in Q1 2026 means that (re)insurers’ annual catastrophe budgets remain ample, with the industry now in an even stronger position to withstand any future individual major events, or the higher loss aggregation of more frequent medium-sized events,” Gallagher Re explained.Moreover, estimates from the broker also show that a single event, or series of large events, generating insured losses of $115 billion to $125 billion above expected average annual catastrophe losses would be required to meaningfully impact the trajectory of pricing across the property re/insurance market.Focusing on Europe, Gallagher Re’s report outlined that the windstorm peril through Q1 2026 was already the continent’s costliest on an economic basis since 1999, even though it failed to produce a major insured (>USD10 billion) industry loss event.

“The nearly 20-year lack of major windstorm events in Europe has raised the question of whether it should still be considered a so-called “peak” peril, considering that every other Nat Cat peril has had at least one >USD10 billion nominal insured loss events during that timeframe,” Gallagher Re explained.Furthermore, the broker’s report also examines severe convective storms (including tornadoes, hail, and straight-line winds) occurring in the United States, as well as the intricate network of hazard and non-hazard factors that have contributed to the increasingly costly trend of insured losses linked to this peril since 2008.Since 2008, the industry has incurred aggregate nominal (actual) losses above $20 billion nine times, as well as losses above $30 billion five times, and above $50 billion in the past three consecutive years (2023–2025).

Gallagher Re’s report indicates that the primary drivers of the increase in losses are macroeconomic and socioeconomic factors, rather than weather or climate influences.It is estimated that 80%-90% of the annual nominal growth in US SCS losses this century can be attributed to non-hazard related elements, such as escalating replacement costs, social inflation, the expansion of more vulnerable exposures, construction and labor expenses, as well as the extreme volatility of global oil and energy prices, which in turn drives higher asphalt material costs.Furthermore, the rapid expansion of housing in hail- and wind-prone regions, particularly within states like Texas, has also amplified exposure to SCS events.

From 2000 to 2025, the top US 20 states with the highest SCS insured losses have reportedly added 14.3 million new housing units, with Texas alone accounting for at least 4.5 million more residential properties.Chief Science Officer Steve Bowen, commented: “The rise in US SCS losses has been staggering since 2008.While climate change has continued to influence weather patterns, the direct links to SCS remain less clear in its contribution to the growth in loss costs during the past nearly 20 years.

When taking a deeper dive into broader socioeconomic and macroeconomic factors, it becomes clear that volatility linked to the energy market, construction / labor costs, social inflation, and how / where people live are the main drivers of these higher losses.” Bowen continued: “Recognizing and incorporating these hugely important factors will remain central to effective underwriting, pricing, and portfolio management. How we limit future loss volatility will depend as much on building smarter and more resilient structures, as it does on understanding the scientific facts of the peril.This will be particularly important as costlier exterior-mounted technologies and the growth in data center exposure adds new loss potential.” Concluding: “The insurance industry must continue to broaden its lens to account for more macroeconomic, socioeconomic, geopolitical, and scientific factors when assessing SCS loss potential.This is true not only in the US, but also internationally, as SCS losses grow in Europe, Asia, and Oceania.” The estimate from Gallagher Re of $20 billion in insured catastrophe losses for Q1, .

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