US Disasters Dominate Global Insurance Losses

Global insured losses from natural catastrophes have once again crossed the US$100 billion threshold, marking the sixth consecutive year this milestone has been exceeded, according to the latest assessment by Swiss Re. The findings underline the growing financial strain placed on insurers worldwide, with the United States emerging as the overwhelming driver of losses amid a year marked by destructive wildfires, powerful storms and mounting climate-related risks.

In total, global insured catastrophe losses reached US$107 billion, equivalent to roughly US$161 billion. While this figure represents a 24 per cent decline compared with 2024’s exceptionally high total of US$141 billion, it remains only slightly below the ten-year average, highlighting the persistence of elevated risk levels. Swiss Re notes that although the overall total has eased, the underlying exposure continues to intensify due to economic and demographic factors.

The United States accounted for approximately 83 per cent of insured losses, or around US$89 billion. Severe thunderstorms and widespread wildfires dominated the first half of the year, with the January wildfires in the Los Angeles region proving particularly costly. Notably, 2025 has set a new record for insured wildfire losses, which surpassed US$40 billion, reflecting both the growing intensity of fires and the increasing value of assets in exposed areas.

Severe convective storms also remained a major concern. For the third consecutive year, global insured losses from this peril exceeded US$50 billion. Swiss Re’s head of catastrophe perils, Balz Grollimund, warned that insurers must reassess how they evaluate storm-related risks. He emphasised that urban expansion into hazard-prone regions, higher construction and repair costs, rising property values and ageing infrastructure have transformed these storms into a core threat for the insurance industry. He further noted that while individual storm events may appear manageable, their cumulative impact can be financially significant.

Beyond the US, Hurricane Melissa, which struck Jamaica in late October, is estimated to have caused losses of around US$2.5 billion. In contrast, the Atlantic hurricane season overall was relatively benign, as no major hurricanes made landfall in the United States for the first time in a decade, helping to limit broader losses.

From an economic perspective, global losses from natural catastrophes totalled approximately US$220 billion, down sharply from US$327 billion last year and 17 per cent below the ten-year average. Despite this improvement, Swiss Re cautions that long-term trends, including climate volatility and continued urbanisation, suggest elevated catastrophe losses are likely to remain a defining feature of the global insurance landscape.