Secondary Perils Fuel Record Catastrophe Losses

Wildfires and storms dominate insured losses despite quieter hurricane season

In 2025, secondary perils—including wildfires, severe convective storms (SCS), and floods—were responsible for an unprecedented 92% of global insured natural catastrophe losses, according to the Swiss Re Institute. Total insured losses reached US$107 billion, driven primarily by the frequency of events affecting densely populated and high-value areas, rather than by a single extreme disaster.

Although the year saw no major US hurricane landfalls, losses remained elevated. Wildfires in Los Angeles alone accounted for US$40 billion, making it the largest insured wildfire event on record. Severe convective storms contributed an additional US$51 billion globally, marking 2025 as the third-costliest year for SCS, following 2023 and 2024. Flood-related losses were comparatively modest at US$3.4 billion, well below the five-year average of US$15.4 billion.

Swiss Re emphasised that although 2025 losses fell below long-term trend levels, this reflected favourable conditions rather than a reduction in underlying risk. Balz Grollimund, head of catastrophe perils at Swiss Re, warned that a return to trend could see insured losses climb to US$148 billion in 2026, with a potential peak-loss scenario of US$320 billion, illustrating the inherent volatility in catastrophe losses.

Long-term analysis shows that exposure growth—population expansion, rising asset values, and higher reconstruction costs—accounts for over 80% of the increase in weather-related insured losses since 1970. Regional variations include:

North America: growth driven by wildfires and SCS; wildfire losses rising ~14% annually

Europe: over half of insured loss growth linked to SCS (~10% annually)

Asia: floods dominate secondary-peril loss growth

Oceania/Australia: losses more evenly split between storms and floods

Severe convective storms are the largest contributor to historical insured loss growth (38%), followed by wildfires (20%) and floods (10%).

Swiss Re also highlighted that changing hazard patterns and vulnerability are increasingly significant. In North America, longer fire seasons and shifts in temperature and precipitation elevate wildfire risk. In Europe, evolving storm characteristics contribute substantially to rising SCS losses.

Global economic losses from natural catastrophes reached US$220 billion in 2025, with approximately 49% insured—the highest share on record. However, protection gaps persist, particularly in emerging markets where 80–90% of catastrophe losses remain uninsured. Jérôme Jean Haegeli, group chief economist at Swiss Re, stressed the importance of ongoing investment in risk mitigation, adaptation, and insurance access to safeguard long-term insurability.

Swiss Re projects insured catastrophe losses to grow 5–7% annually over the long term, driven mainly by exposure growth, while hazard and vulnerability factors are expected to play an increasingly prominent role. The findings underline the essential role of reinsurance, risk management, and adaptation strategies in a world of escalating and interconnected catastrophe risks.