Severe convective storms (SCS) have emerged as the leading cause of insured losses worldwide, surpassing tropical cyclones, according to Aon’s 2026 Climate and Catastrophe Insight report. The findings highlight a growing structural challenge for the global insurance and reinsurance sectors as mid-sized, high-frequency disaster events increasingly dominate claims.
Globally, insured losses reached $127 billion in 2025, significantly above the long-term average of $99 billion since 2000 and 47% higher than the median of $86 billion. Economic losses from natural disasters, meanwhile, totalled $260 billion, with the gap between economic and insured losses narrowing to 51%, the lowest level on record. This convergence reflects the concentration of losses in highly insured markets, particularly the United States, which accounted for 81% of global insured losses.
The Myanmar earthquake was the deadliest single event of the year—excluding heatwaves—causing $15.7 billion in economic damage. Other major loss drivers included flooding in China and cyclones in South and Southeast Asia, while Australia experienced two separate billion-dollar insured loss events.
Aon’s report emphasises that SCS alone generated $61 billion in insured losses in 2025, the third-highest annual total on record, signalling that frequent, medium-scale events are becoming a structural concern for the industry. Wildfires and heat-related events also contributed heavily to losses. The Palisades and Eaton Fires in California, for example, produced a record $41 billion in insured losses, reinforcing the prominence of secondary perils in accumulation risk.
| Event Type | 2025 Insured Losses | Notable Details |
|---|---|---|
| Severe Convective Storms (SCS) | $61B | Third-highest on record; primarily US exposure |
| Earthquake (Myanmar) | $15.7B | Deadliest global event aside from heatwaves |
| Cyclones (South & SE Asia) | $X.XB* | Significant insured and economic losses |
| Flooding (China) | $X.XB* | Major regional impact |
| Wildfires (California) | $41B | Highest insured losses for wildfire events |
| Other billion-dollar events | $X.XB* | Australia & other regions |
*Exact insured loss values not disclosed in the report.
The report notes that the number of $30 billion+ insured loss events in 2025 exceeded the long-term average of 17, further highlighting the risk of capital strain and pricing inadequacy. Insurers are expected to continue facing annual insured losses exceeding $100 billion, even in years with relatively low disaster activity.
Aon predicts that the growing frequency of medium-scale catastrophes will encourage broader adoption of alternative risk transfer mechanisms and parametric insurance solutions, providing faster liquidity and additional capital buffers. As climate trends continue to evolve, insurers and governments alike must prepare for a future dominated not by isolated mega-catastrophes, but by recurrent, high-frequency events affecting both developed and emerging markets.