Insured losses from natural catastrophes will exceed the $100 billion mark in 2025 for the sixth consecutive year, amid warnings that the world needs to accept the figure is the new normal.

Reinsurer Swiss Re said this year’s total has been mainly driven by the unprecedented LA wildfire loss record in the first quarter of 2025 and severe convective storms (SCS), which remain a major and persistent global loss driver. Overall, the Swiss Re Institute estimates total insured losses in 2025 at $107 billion, 24% lower than the $141 billion recorded in 2024.

Jérôme Jean Haegeli, Swiss Re’s group chief economist, explained: “Amid annual volatility, insured losses keep rising. That’s why strengthening prevention, protection and preparedness is essential to protect lives and property. Reinsurers and the broader insurance sector have a dual role: acting as financial shock absorbers and supporting the development of resilient, risk-informed public policy and private investment that reduce future losses.”

With 83% of estimated $107 billion global insured losses the US is again the most affected market in 2025 ($89 billion). This was driven primarily by wildfires and SCS.

The reinsurer said 2025 produced the highest insured wildfire losses on record of $40 billion. “The scale of destruction reflects a convergence of meteorological drivers, such as extended hot, dry conditions and strong winds, with greater exposure – especially housing and high-value residential assets expanding into hazardous wildland-urban interface (WUI) zones,” the research added.

Global insured losses from severe convective storms reached $ 50 billion this year, making 2025 the third costliest year after 2023 and 2024 and continuing a multi-year upward trajectory. There was much SCS activity in the first half of 2025 in the US, with several severe tornado outbreaks in March and May driving above-average tornado and wind reports, while hail activity remained close to average. SCS activity in the second half of the year so far has been muted, with both hail and broader thunderstorm impacts running below seasonal norms.

In Europe, notable hailstorms occurred in May and June, though insured losses were limited as the most intense activity affected regions with lower concentrations of high-value exposure. Overall, SCS remains a major contributor to global natural catastrophe losses.

Balz Grollimund, Swiss Re’s head catastrophe perils, added: “We are observing a steady rise in losses from severe convective storms. Urbanisation in hazard-prone areas, rising asset values, higher construction costs and factors such as ageing roofs have made these storms a key peril for insurers. As single events rarely result in a large insured loss, it is key for insurers to consider the cumulative effect of frequent, low-loss events, along with increasing property values and repair costs. A more holistic view of this peril is critical to assure proper underwriting and risk management.”

The study said Hurricane Melissa made landfall in southwestern Jamaica in October as a Category-5 hurricane, with estimated winds near 298 km/h – the strongest storm ever to strike Jamaica and one of the most powerful Atlantic hurricanes on record when making landfall. It caused catastrophic wind damage, severe flooding and landslides across Jamaica and also affected Haiti and Cuba.

“Hurricane Melissa is currently the costliest hurricane event of 2025, with estimated insured losses of up to $2.5 billion,” the Swiss Re Institute stated. “The North Atlantic (TCNA) tropical cyclone season has seen 13 named storms, 5 hurricanes, 4 major hurricanes and three Category-5 hurricanes (Erin, Humberto and Melissa). For the first time in ten years, none of these hurricanes made landfall on the US coast, which explains why insured losses from this peril are set to be low in 2025.”

“Amid annual volatility, insured losses keep rising. That’s why strengthening prevention, protection and preparedness is essential to protect lives and property. Reinsurers and the broader insurance sector have a dual role: acting as financial shock absorbers and supporting the development of resilient, risk-informed public policy and private investment that reduce future losses.”

Jérôme Jean Haegeli, Swiss Re