Swiss Re, Munich Re Warn of Rising Global Risks

Swiss Re and Munich Re expect growing demand for reinsurance as natural catastrophes, geopolitical uncertainty, artificial intelligence, and cyber threats create increasingly complex and interconnected risks. New Swiss Re Institute research indicates a major Florida hurricane could generate insured losses exceeding $300 billion.

Both companies emphasize the importance of risk modeling, underwriting expertise, and prevention measures as insurers confront evolving exposures and potential loss accumulations.

Swiss Re estimates insured natural catastrophe losses are increasing 5–7 percent annually, driven by rising asset values, expanding exposures, and changing hazard patterns. Its modeling indicates insured losses could reach approximately $320 billion in a peak-loss year in 2026.

A separate Swiss Re Institute analysis marking the 100th anniversary of the 1926 Great Miami Hurricane found that a Category 5 hurricane striking Miami or Tampa Bay today could produce insured losses of $300 billion or more, exceeding any recorded single-event insured loss.

A repeat of the Category 4 Great Miami Hurricane could generate approximately $200 billion in insured losses, while Hurricane Andrew following its 1992 track today could produce losses approaching $100 billion.

The findings demonstrate the significance of population growth and property concentrations. Miami-Dade County's population has increased from just over 100,000 in 1926 to approximately 2.8 million today. More than 2 million homes in the Miami metropolitan area, representing reconstruction costs exceeding $600 billion, face moderate or greater hurricane wind risk.

"The Atlantic hurricane season has been relatively quiet so far this year, but it only takes one major storm making landfall in a highly exposed area to turn a quiet season into a costly one," said Balz Grollimund, head of catastrophe perils at Swiss Re.

Munich Re reported that global insured natural catastrophe losses exceeded $100 billion for the sixth consecutive year in 2025. Insured losses from non-peak perils, including hailstorms and other less severe events, reached $104 billion, surpassing $100 billion for the first time.

Wildfires are another growing concern. Swiss Re identified wildfire as the fastest-growing weather peril globally, with insured wildfire losses in Europe increasing an estimated 8–11 percent annually over recent decades. Munich Re reported that California wildfires caused $54 billion in economic losses in 2025, the highest amount recorded for that category.

Both reinsurers also identified technological developments as emerging sources of risk.

Swiss Re Institute projects cumulative data center investments will exceed $6 trillion by 2030, creating an estimated $91 billion global insurance premium opportunity by the end of the decade. Approximately 40 percent of US data center capacity is located in areas with significant to very high tornado activity. Dependencies on electricity grids, water supplies, and digital infrastructure create additional risk concentrations.

Munich Re identified cyber attacks and exposures related to artificial intelligence (AI) as increasingly important business risks requiring specialized modeling and coverage. Its research found that 89 percent of companies surveyed do not feel adequately protected against cyber threats. Although cyber insurance standards have become more established, Munich Re said AI-related coverage remains less developed, requiring greater underwriting expertise and clearer contractual terms.

US liability exposures also present challenges. Swiss Re reported commercial liability losses of $174 billion in 2025, exceeding global insured natural catastrophe losses of $120 billion that year. Elevated jury verdicts and litigation uncertainty continue to complicate claims severity projections.

Geopolitical tensions are further increasing exposure to supply chain disruptions, commodity price volatility, and inflation, potentially raising repair, replacement, and insurance claims costs.

"As risks become more complex, underwriting increasingly depends on understanding how exposures interact and where concentrations can develop," said Gianfranco Lot, chief underwriting officer of property and casualty reinsurance at Swiss Re.

Munich Re emphasized the importance of capital strength and portfolio diversification amid changing market conditions. The company reported that reinsurance capital has grown an average of 5.8 percent annually over the past 8 years.

Swiss Re's hurricane analysis also identifies stronger building codes, wind-resistant construction, and catastrophe modeling as important risk mitigation measures. Updated construction standards helped newer Florida homes withstand Hurricane Ian in 2022, while roof improvements further reduced vulnerability.