Catastrophe (CAT) losses, driven by natural disasters and climate-related events, are a critical measure of risk in the global insurance and reinsurance industry. While the term is broad, it primarily encompasses the insured and uninsured economic damage from events like hurricanes, wildfires, floods, and earthquakes. Recent reports from leading reinsurance and broking firms, including Swiss Re, Aon, and Gallagher Re, highlight a clear trend: CAT losses are not only increasing but are also being driven by a shift in the nature of the events themselves.
Swiss Re Analysis
Swiss Re’s analysis indicates that global insured losses from natural catastrophes are on a long-term growth trend, increasing at a rate of 5%-7% annually in real terms. The firm’s preliminary estimates for the first half of 2025 put global insured losses at approximately $80 billion, nearly double the 10-year average. This was largely driven by unprecedented wildfires in California and severe convective storms in the U.S. Swiss Re also notes a concerning rise in wildfire-related losses, which now account for 7% of all natural catastrophe claims, up from around 1% before 2015.
Aon Analysis
Aon’s H1 2025 report corroborates this trend, with an even higher preliminary estimate of at least $100 billion in global insured losses for the first half of the year—the second highest on record. Similar to Swiss Re, Aon attributes over 90% of these losses to events in the U.S., particularly wildfires and severe convective storms. The report also highlights a “protection gap”—the difference between total economic and insured losses—that is at its lowest recorded level in the U.S., reflecting the country’s high insurance penetration. However, the gap remains significant in other regions, especially in Asia and Latin America.
Gallagher Re
Gallagher Re’s H1 2025 report offers a slightly lower, but still elevated, estimate of at least $84 billion in global insured losses. The firm’s analysis also points to the dominance of U.S. weather and climate-related events, with wildfires and severe convective storms accounting for 92% of all insured losses from these perils. Despite these elevated losses, Gallagher Re suggests that the broader reinsurance sector is well-capitalized to handle such events, although the high frequency of high-cost events signals a “new market reality.”
Versick
Insights from the Versick report also add to this global perspective. According to their 2025 Global Modeled Catastrophe Losses report, the average annual insured property loss from natural catastrophes has risen to a staggering $152 billion. The report emphasizes a shift from a landscape historically dominated by single, large events like hurricanes to one where “frequency perils” such as severe thunderstorms, winter storms, and wildfires are now the primary drivers, accounting for nearly two-thirds of the total modeled losses. The increase is attributed to accelerated exposure growth, including urban expansion into high-risk areas and rising asset values, with long-term climate effects accounting for a smaller portion of the year-on-year increase.
A Look Back at Prior Years
The trend of increasing CAT losses is not a new phenomenon. In the past couple of years, the world has seen a series of costly events. According to Swiss Re’s sigma report, global insured losses from natural catastrophes reached $137 billion in 2024. This was primarily driven by hurricanes Helene and Milton, severe convective storms in the U.S., and large-scale urban floods globally. Aon’s 2022 report highlighted that natural disasters caused a $313 billion global economic loss, with $132 billion of that covered by insurance, making it the fifth costliest year on record for insurers. The most significant event was Hurricane Ian in the U.S., which was the second-costliest natural catastrophe in history from an insurance perspective at the time. These reports consistently show a pattern of rising losses, driven by a combination of climate change, urban expansion into hazard-prone areas, and increasing asset values.
Sources
https://www.aon.com/en/insights/reports/climate-and-catastrophe-report
