For the sixth year running, 2025 will see over $100 billion of natural catastrophe losses covered by sources of insurance and reinsurance capital, according to Swiss Re’s Institute, with the research part of the reinsurer projecting a total of around US $107 billion for the year.The Los Angeles wildfires at the beginning of the year and severe convective storms are seen as the main drivers of insured losses this year.The US $107 billion total is a meaningful drop on 2024’s US $141 billion natural catastrophe insured loss bill, which has served to bolster industry capital and returns for the reinsurance and insurance-linked securities community in 2025.Some 83% of the 2025 insured natural catastrophe losses came from the United States, as that market continues to be the dominant financial exposure to severe weather and catastrophes for the global insurance, reinsurance and ILS industry.

Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, said, “Amid annual volatility, insured losses keep rising.That’s why strengthening prevention, protection and preparedness is essential to protect lives and property.Reinsurers and the broader insurance sector have a dual role: acting as financial shock absorbers and supporting the development of resilient, risk-informed public policy and private investment that reduce future losses.” While the Los Angeles wildfires were the most costly insured loss event ever for the wildfire peril at $40 billion, severe convective storms globally remain the most dominant peril contributor to the annual total.

Swiss Re estimates that severe convective storm (SCS) events around the world will have driven $50 billion of insured losses in 2025, the third highest figure on record after 2023 and 2024.This serves to demonstrate the need for discipline on catastrophe reinsurance contracts related to so-called secondary perils, as well as on aggregate deals given how SCS is typically a loss contributor to them.aBalz Grollimund, Swiss Re’s Head Catastrophe Perils, commented, “We are observing a steady rise in losses from severe convective storms.

Urbanisation in hazard-prone areas, rising asset values, higher construction costs and factors such as ageing roofs have made these storms a key peril for insurers.As single events rarely result in a large insured loss, it is key for insurers to consider the cumulative effect of frequent, low-loss events, along with increasing property values and repair costs.A more holistic view of this peril is critical to assure proper underwriting and risk management.” The low level of hurricane losses experienced in the Atlantic this year was a driver for the reduced level of annual insured catastrophe losses.

The protection gap remains significant globally, with economic losses from natural catastrophe events coming in at $220 billion, compared to the just $107 billion that were insured.Both figures are below the ten-year averages for nat cat losses, of $267 billion economic and $111 billion insured.Man-made catastrophe losses are estimated at $13 billion economic and $11 billion insured by Swiss Re, with that insured figure some 5% above the ten year average for man-made loss events..

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