This blog summarizes the latest Swiss Re industry findings on insured losses from extreme weather in 2025. It highlights the dominance of secondary perils such as wildfires, storms and floods, the widening gap in coverage, and the implications for risk modeling, policy design, and resilience planning in a changing climate.
Overview of 2025 insured losses: what the Swiss Re data show
Swiss Re reports that total insured losses from extreme weather reached about $107 billion in 2025, with wildfires the largest single contributor. The study notes a historic share for secondary perils—wildfires, thunderstorms and floods—accounting for 92% of insured natural catastrophe losses, the highest on record and well above the 2015–24 average.
The report also explains that the year’s losses were lower than 2024 largely because there was no major US hurricane landfall. Forecasts for 2026 range from $148 billion under normal trends to as much as $320 billion if major events occur.
While these figures focus on insured losses, attribution studies link many observed trends to human-caused climate change. The Swiss Re report itself offers only a cautious discussion of climate change in its analysis.
The UN’s broader estimates for the Los Angeles fires illustrate the wider social and ecosystem damages beyond insurance payouts. This highlights the scale of economic disruption tied to these events.
Primary drivers of losses in 2025
The 2025 loss landscape reflects several interrelated factors that amplified payouts and risk exposure:
- Wildfires were the largest driver, with about $40 billion in insured losses. Notable fires such as the Los Angeles Palisades and Eaton fires contributed to this total, underscoring how regional conflagrations can dominate annual loss tallies.
- Severe convective storms generated roughly $51 billion in insured losses, driven by intense, localized rainfall and hail. These events also damage rooftop solar panels, illustrating cross-sector vulnerability.
- Secondary perils—including wildfires, thunderstorms and floods—collectively accounted for 92% of losses, marking a structural shift in the risk profile toward frequent, less extreme but highly costly events.
- Exposure growth and rising vulnerability explain more than 80% of the increase in weather-related losses since 1970, reflecting more high-value assets in hazard-prone areas and aging infrastructure.
- Underinsurance and data gaps in emerging economies amplify the gap between economic losses and insured losses, leaving many communities financially exposed to disaster shocks.
Insurance gaps and the broader economic picture
Swiss Re stresses that insured losses understate the total economic damage from extreme weather. Less than half of weather-related losses are typically insured, a gap that is especially pronounced in emerging economies where insurance penetration remains low.
The Los Angeles fires alone are estimated by the UN to have caused economic losses of approximately $250–275 billion. Societal and ecosystem impacts extend far beyond insurance payouts.
Implications for policy and resilience
The findings prompt a clear call to action for insurers, policymakers and researchers: update modelling, expand adaptation, and accelerate mitigation to preserve insurability as risk grows.
Attribution studies support the link between climate change and the observed rise in extreme weather, even if a single report does not dwell on that narrative.
The path forward involves both better risk assessment and stronger resilience at the community and infrastructure levels.
- Develop and employ updated risk models that explicitly incorporate observed trends in hazard intensity, frequency and exposure.
- Improve insurance penetration in emerging economies to close protection gaps and reduce systemic vulnerability.
- Invest in adaptation and mitigation measures to limit future insured losses and preserve insurability.
- Advance data collection and attribution research to better quantify the climate signal in loss patterns.
- Strengthen urban planning and energy infrastructure resilience, including protection for rooftop solar and other distributed-energy assets from severe convective events.
Here is the source article for this story: How wildfires and storms drove insurance losses in 2025 – in three charts