Natural Catastrophe Insurance Losses Could Hit $145 Billion in 2025 as Peak Loss Risk Grows

Global insured losses from natural catastrophes are set to trend towards $145 billion in 2025, following a consistent 5–7% annual growth rate, according to Swiss Re Institute. The industry faces a 1-in-10 probability of losses exceeding $300 billion in a peak loss year, a scenario fueled by growing urbanization, higher reconstruction costs, and the increasing frequency of severe weather events. Recent examples include $40 billion in wildfire-related claims in Los Angeles County at the start of 2025 and $53 billion in severe convective storm losses globally in 2024.

While secondary perils such as floods, wildfires, and storms continue to drive consistent annual claims, primary perils like major earthquakes and hurricanes pose the greatest threat to catastrophic losses. Swiss Re warns that despite a quiet period since 2017, major loss spikes are not a matter of if, but when. Protection gaps remain significant, with only 43% of economic losses from natural disasters insured in 2024.

Nonetheless, Swiss Re asserts the re/insurance industry remains resilient, with traditional reinsurance capital above $500 billion and alternative markets like catastrophe bonds continuing to grow. The industry’s ability to manage escalating risks hinges on maintaining capital strength, improving adaptation measures like stronger building codes, and closing insurance protection gaps to safeguard against record-breaking loss years.