Climate-driven natural disasters are continuing to reshape the financial outlook of the global insurance industry, with insured losses once again exceeding the US$100 billion threshold. According to the latest assessment released by Swiss Re, this milestone has now been surpassed for the sixth consecutive year, reinforcing concerns that elevated catastrophe losses are no longer exceptional events but part of a persistent structural trend.
Swiss Re’s findings reveal that global insured losses from natural catastrophes reached approximately US$107 billion. While this figure marks a 24 per cent decline from the exceptionally high losses recorded in 2024, it remains close to the long-term average, underscoring the enduring nature of catastrophe risk. When broader economic impacts are taken into account, total losses are estimated at around US$161 billion, highlighting the wider consequences for economies beyond the insurance sector alone.
The United States emerged as the dominant contributor to global insured losses, accounting for roughly 83 per cent of the total, or about US$89 billion. A combination of severe thunderstorms and widespread wildfires caused extensive damage throughout the year, particularly during the first half. The January wildfires in the Los Angeles region proved especially destructive, pushing insured wildfire losses beyond US$40 billion. This marks a new record and reflects both the increasing severity of fire events and the growing concentration of high-value properties in fire-prone areas.
Severe convective storms remained another major source of concern. For the third year in a row, global insured losses linked to these storms exceeded US$50 billion. Swiss Re’s head of catastrophe perils, Balz Grollimund, has warned that insurers must reconsider how they assess and price storm-related risks. Factors such as rapid urban expansion into hazard-exposed regions, rising construction and repair costs, escalating property values and ageing infrastructure have collectively transformed severe storms into a core and recurring threat. While individual events may appear manageable, their cumulative financial impact is proving increasingly difficult to absorb.
Outside the United States, Hurricane Melissa delivered a stark reminder of regional vulnerability when it struck Jamaica in late October, generating estimated insured losses of around US$2.5 billion. Despite this, the broader Atlantic hurricane season was relatively subdued. For the first time in a decade, no major hurricanes made landfall in the United States, helping to contain what could otherwise have been far higher losses.
From a wider economic standpoint, global losses from natural catastrophes reached approximately US$220 billion. This represents a significant decline from last year’s US$327 billion total and stands 17 per cent below the ten-year average. Nevertheless, Swiss Re cautions that long-term trends such as climate volatility, ongoing urbanisation and rising asset values suggest that elevated catastrophe losses will remain a defining feature of the global insurance landscape.