Global insured losses from natural catastrophes are on trend to hit USD 145 billion in 2025, continuing a steady 5%–7% annual growth trend seen in recent years, according to reinsurance giant Swiss Re.
In their latest sigma report, Swiss Re noted that insured losses totaled USD 137 billion in 2024, with the increase largely driven by secondary perils such as severe convective storms (SCS), floods, and wildfires.
These types of events, which were once considered less significant, have now become major contributors to rising loss totals, underlining the evolving risk landscape facing insurers and reinsurers.
“Global natural catastrophe insured losses were on trend in 2024, coming in at USD 137 billion. The main drivers were Hurricanes Helene and Milton, and severe convective storms. Secondary perils made the biggest contribution to global losses, and the dramatic fires in Los Angeles in January this year point to another year of high losses from this category in 2025,” Swiss Re explained.
“If the average annual 5‒7% increase in losses holds, insured losses will trend towards USD 145 billion in 2025. In recent years, the pattern has been that secondary perils have contributed more to annual insured losses than have primary perils. However, primary perils still hold the largest loss potential. History shows that just one major primary peril event like a tropical cyclone striking an urban area with high population and property concentration can trigger losses many multiples higher than trend.”
Swiss Re’s report points towards the Los Angeles wildfires that took place at the beginning of the year as a major contributor to its projected USD 145 billion figure, with the event causing an estimated USD 40 billion in insured losses.
However, Swiss Re explained that the fires on their own will not cause a notable deviation from the annual loss growth trend for natural catastrophes (of 5%-7%).
Following the wildfires, Q1 2025 has already marked a historically costly start for the global insurance industry. Reinsurance broker Gallagher Re estimates that preliminary total insured catastrophe losses for the opening quarter reached USD 56 billion, making it the costliest Q1 for both private insurers and government-sponsored entities since 2011, and a 176% increase over the Q1 decadal average of USD 20 billion (2015–2024).
Broker Aon’s figures are similarly stark, placing Q1 insured losses at over USD 53 billion, more than triple the 21st-century Q1 average of USD 17 billion, and ranking it as the second-highest total on record after Q1 2011.
Furthermore, the reinsurer notes that rising exposures due to economic and population growth, as well as urbanisation, continues to drive insured losses higher.
“Losses are primarily driven by socioeconomic factors. The main driver keeping insured losses on a steep upward trajectory is rising exposure values as a result of economic growth and expanding populations, often in regions susceptible to severe weather conditions,” Swiss Re said.
Adding: “Urbanisation is leading to denser urban areas and higher concentration of more valuable assets at risk that need insuring. At the same time, inflation pressure, including in construction costs, is driving exposure values even higher and makes rebuild more expensive. In addition, observed climate change effects are also playing a role in compounding losses for some perils and regions.”
As has been the case in recent years, most of the global insured losses that were recorded in 2024 were driven by secondary perils, in particular SCS. However, primary perils (tropical cyclones and earthquakes) still hold most loss potential, Swiss Re further explained.
Adding: “This as demonstrated by the five so called “peak loss” years that have occurred in the last 30, when annual losses were way above trend. The last peak loss year was 2017, when hurricanes Harvey, Irma and Maria drove global insurance losses to 111% above trend.”
Swiss Re’s natural catastrophe models point to a 1-in-10 probability that global insured losses could reach as high as USD 300 billion in 2025, making what would be the next peak loss year.
“Peak loss years, due to either the accumulation of many loss events or those from a few individual large events, should not be considered a freak occurrence. History repeats and it’s not a question of if, but when the insurance industry will face the next peak loss year,” Swiss Re added.
Swiss Re noted that the reinsurance market is well able to absorb peak loss scenarios today, including the 1-in-10 chance that insured losses this year rise to USD 300 billion or more.
“Reinsurance plays a critical role as a shock absorber of peak loss year volatility and is expected to cover more than half of all above-trend global losses. With global reinsurance capital currently estimated to be around USD 500 billion, and leading reinsurers having an average solvency ratio of around 250%, the reinsurance market would remain well capitalised, even after covering its share of a USD 300 billion loss,” the firm explained.
Swiss Re also highlights the growing contribution of alternative capital to the sector’s risk-bearing capacity. The reinsurer explains that catastrophe bonds and other forms of insurance-linked securities (ILS) have become vital sources of support, particularly for low-frequency, high-severity peak risks and retrocession.
“In the last decade, the cat bond market segment, which mostly addresses peak risks, has grown by about 7% per annum since 2015, and is on track to exceed the USD 50 billion mark for 2025,” the reinsurer added.
