Wildfires, storms, and floods drive insured losses despite calmer hurricane seasons
Secondary perils—events other than major hurricanes or earthquakes—accounted for a record 92% of global insured natural catastrophe losses in 2025, according to the latest analysis from Swiss Re Institute.
Total insured losses reached US$107 billion, largely driven by wildfires, severe convective storms (SCS), and floods. The high frequency of events in densely populated and high-value regions contributed to the elevated losses, even in the absence of a major US hurricane landfall.
Wildfires in Los Angeles alone generated approximately US$40 billion in insured losses, marking the largest insured wildfire event on record according to sigma data. Severe convective storms caused a further US$51 billion in losses globally, making 2025 the third-costliest year for SCS in historical terms (adjusted for 2025 prices), behind 2023 and 2024. Flood losses were relatively modest at US$3.4 billion, below the previous five-year average of US$15.4 billion.
| Peril Type | Insured Losses 2025 (US$ 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 cautioned that although 2025 losses were below the long-term trend, this reflects favourable conditions rather than any reduction in inherent risk. Balz Grollimund, head of catastrophe perils at Swiss Re, projected a return to trend could see insured losses reach US$148 billion in 2026, with a modelled peak-loss scenario of around US$320 billion.
Long-term growth in exposure—rising populations, increasing asset values, and higher reconstruction costs—accounts for over 80% of the rise in global weather-related insured losses since 1970. Regional patterns differ:
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North America: wildfires and SCS dominate; wildfire losses rising ~14% annually
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Europe: SCS drives more than half of insured loss growth, ~10% annually
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Asia: floods dominate secondary-peril growth
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Oceania/Australia: losses split between storms and floods
SCS remain the largest contributor to historical insured loss growth (38%), followed by wildfires (20%) and floods (10%).
Swiss Re highlighted that exposure alone does not fully explain recent trends. In North America, longer fire seasons and changing weather patterns increase wildfire risk. In Europe, evolving storm intensity and vulnerability contribute significantly to rising SCS losses.
Despite insured coverage reaching 49% of global economic losses in 2025—the highest share on record—protection gaps remain acute in emerging markets, where 80–90% of catastrophe losses are typically uninsured. Jérôme Jean Haegeli, group chief economist, emphasised the need for ongoing investment in risk mitigation, adaptation, and broader insurance access to safeguard long-term insurability.
Swiss Re forecasts insured catastrophe losses will continue to rise 5–7% annually over the long term, primarily due to exposure growth, with hazard and vulnerability increasingly influencing outcomes. The findings underscore the critical role of adaptation, reinsurance, and risk management in an era of intensifying secondary-peril events.