Global Natural Catastrophe Insured Losses Hit $107 Billion in 2025, Driven by Record Wildfires and Elevated Storm Activity

Global insured losses from natural catastrophes reached $107 billion in 2025, according to Swiss Re Institute’s sigma No. 1/2026 report. The figure falls below the $140 billion implied by the long-term growth trend, largely because no major hurricane made landfall in the United States.

Secondary perils accounted for 92% of insured losses, an all-time high. Wildfires set a new loss record, and severe convective storms (SCS) posted their third-costliest year. Together, those two perils drove the secondary peril share to its highest level on sigma records.

LA Fires Set New Wildfire Benchmark

The Palisades and Eaton fires in Los Angeles County in January produced combined insured losses of $40 billion, the largest global insured wildfire loss on record and a top-10 costliest event across all natural catastrophe perils in sigma history. The fires destroyed more than 16,000 structures, nearly three times the average annual number since 2016, even though California’s total burned area in 2025 was roughly one-third of the post-2016 average. Without those fires, 2025 would have been the least costly year for insurers since 2016.

Wildfire insured losses have grown at an estimated 12% per year, with North America seeing annual growth of 14%. More than 60% of that growth is not explained by exposure factors alone, pointing to hazard intensification and disproportionate settlement expansion in high-risk wildland-urban interface zones. About one in three Californians now lives in the WUI.

SCS Losses Remain Elevated

SCS insured losses reached $51 billion in 2025, above the long-term trend of roughly 7% annual growth. The number of SCS events causing losses of $1 billion or more was 44% higher in the five years ending in 2025 compared to the prior five-year period. In Europe, SCS losses are growing at an estimated 10% annually, with less than half of that growth explained by exposure, suggesting that hazard intensification and changes in vulnerability are playing a significant role.

Trend Points Higher

Swiss Re Institute estimates that if 2026 reflects the long-run growth trend of 5-7% annually in real terms, global natural catastrophe insured losses would reach $148 billion. By 2030, the trend implies $186 billion. In a peak-year loss scenario, defined as losses exceeding trend by at least one standard deviation with a 10% annual probability, 2026 losses could reach $320 billion. By 2030, a peak year could produce approximately $400 billion in insured losses, more than double the last actual peak year in 2017.

Protection Gap Narrows but Persists

Total economic losses from natural catastrophes were $220 billion in 2025. About 49% were insured, the highest share on sigma records, reflecting the concentration of losses in higher-penetration perils and markets. Even so, the global protection gap stood at $112 billion. In emerging economies, 80-90% of catastrophe losses remain uninsured.