Secondary Perils Drive 92 Percent of 2025 Insured Cat Losses

Secondary perils, including wildfires, severe convective storms, and floods, accounted for 92 percent of global natural catastrophe (cat) insured losses in 2025, totaling $107 billion, according to Swiss Re Institute. The year was marked by a high frequency of events affecting densely populated and high-value areas, despite overall losses coming in below long-term trends.

Wildfires in Los Angeles generated approximately $40 billion in insured losses, the largest wildfire loss event on sigma record. Severe convective storms contributed $51 billion globally, making 2025 the third-costliest year for such events after 2023 and 2024. Flood-related losses were significantly lower, at $3.4 billion compared to a 5-year average of $15.4 billion.

"The below-trend natural catastrophe losses seen in 2025 are the result of favorable variability rather than any easing of underlying risk. If losses return to normal long-term levels, they would total $148 billion in 2026. According to our modeled peak-loss scenario, insured losses could even climb to about $320 billion in 2026. As exposure keeps building, the upward trend in insured losses is structural and it is critical to identify the risk drivers behind this to manage and reduce risks before losses occur," Balz Grollimund, head catastrophe perils, said.

Swiss Re's analysis shows that long-term insured losses continue to grow at an annual rate of 5–7 percent, driven largely by population growth, rising asset values, and increasing reconstruction costs. Between 1970 and 2025, more than 80 percent of the increase in weather-related insured losses is attributed to exposure growth.

"A peak loss scenario year could be more than double the recent annual insured natural catastrophe losses and exceed $300 billion. Further risk awareness, adaptation, and mitigation, alongside sufficient insurance and reinsurance, play vital roles in societal resilience. We protect against peak risks by absorbing low-frequency, high-severity events that can quickly turn a quiet year into a record loss year," Urs Baertschi, CEO property and casualty reinsurance, said.

Regionally, North America has seen rapid growth in wildfire and severe convective storm losses, with wildfire losses increasing at an annual rate of 14 percent. In Europe, severe convective storms account for more than half of insured loss growth, while floods dominate in Asia.

Global economic losses from natural catastrophes reached $220 billion in 2025, with 49 percent insured—the highest share on sigma record. Protection gaps remain significant in emerging markets, where 80–90 percent of losses are typically uninsured.

"Most long-term loss growth comes from a simple reality: more valuable property is being built in harm's way, and rebuilding costs have risen. At the same time, sigma analysis suggests that for some perils and regions, hazards and vulnerability are evolving faster than exposure alone would imply. As such, sustained and well-designed adaptation and risk mitigation measures are increasingly decisive to keep insurance viable and affordable—and to reduce the global protection gap represented by underinsurance," Jérôme Jean Haegeli, head Swiss Re Institute and group chief economist, said.