Secondary perils dominate global catastrophe claims despite calmer hurricane activity
In 2025, secondary perils—including wildfires, severe convective storms (SCS), and floods—accounted for 92% of global insured natural catastrophe losses, according to Swiss Re Institute. Total losses reached US$107 billion, reflecting a year shaped more by the frequency of events than by any single extreme disaster.
Despite the absence of a major US hurricane landfall, losses remained high due to repeated events in highly populated and high-value regions. Los Angeles wildfires alone generated roughly US$40 billion in insured claims, setting a new record for wildfire losses on sigma data. Severe convective storms added US$51 billion, marking 2025 as the third-costliest year for SCS globally, after 2023 and 2024. Flood losses were comparatively low at US$3.4 billion, below the five-year average of US$15.4 billion.
| Catastrophe Type | 2025 Insured Losses (US$ billion) | Notes |
|---|---|---|
| Wildfires | 40 | Largest single wildfire loss recorded |
| Severe Convective Storms (SCS) | 51 | Third-costliest year on record |
| Floods | 3.4 | Below five-year average |
| Total | 107 | 92% from secondary perils |
Swiss Re notes that while 2025 losses were below the long-term trend, this reflects favourable conditions rather than a reduction in underlying risk. Balz Grollimund, head of catastrophe perils, stated that a return to trend in 2026 could push insured losses to US$148 billion, with a peak-loss scenario of US$320 billion, highlighting the inherent volatility of catastrophe risk.
Long-term analysis shows that exposure growth—population increases, higher asset values, and rising reconstruction costs—accounts for over 80% of the rise in weather-related insured losses since 1970. Regional drivers differ:
North America: wildfires and SCS dominate; wildfire losses rising ~14% annually
Europe: SCS contribute over 50% of insured loss growth, ~10% per year
Asia: floods are the primary driver of secondary-peril losses
Oceania/Australia: losses are split between storms and floods
Historically, SCS are responsible for 38% of insured loss growth, followed by wildfires (20%) and floods (10%).
Swiss Re highlighted that changing hazard patterns and vulnerability increasingly influence losses. In North America, longer fire seasons and climatic shifts are raising wildfire risk, while in Europe, evolving storm characteristics contribute significantly to rising SCS losses.
Globally, economic losses from natural catastrophes reached US$220 billion in 2025, with 49% insured—the highest proportion on record. Nevertheless, protection gaps persist in emerging markets, where 80–90% of losses remain uninsured. Jérôme Jean Haegeli, group chief economist, emphasised the importance of investment in risk mitigation, adaptation, and insurance accessibility to preserve long-term insurability.
Swiss Re projects that insured catastrophe losses will continue to grow 5–7% per year, driven primarily by exposure, with hazard and vulnerability factors becoming increasingly significant. The findings underscore the crucial role of adaptation, reinsurance, and risk management in addressing complex, interconnected catastrophe risks.