Gallagher Re released its full-year 2025 Natural Catastrophe and Climate Report, concluding that global catastrophe losses remained manageable for the re/insurance sector.
Total insured losses for the year reached an estimated $129 bn, roughly 5% below the average recorded between 2015 and 2024.
Losses clustered heavily in the United States, which accounted for $100 bn, or 78% of global insured losses. The most expensive loss sequence arrived early. January wildfires in Los Angeles generated an estimated $41 bn in insured losses, making them the single largest event for insurers during the year.
Severe convective storms emerged again as the dominant driver of industry losses. These events accounted for at least 47% of global insured losses, equivalent to $60 bn.
Of that total, $51 bn was recorded in the US alone, reinforcing the country’s outsized role in annual catastrophe loss totals.
Catastrophe activity affected a wide range of regions, yet aggregate financial impacts stayed within tolerable bounds for most insurers.
La Niña conditions prevailed for much of the year, contributing to weather volatility across developed and emerging markets. Exposure levels continued to rise, even where loss outcomes stayed muted.
Direct economic losses from natural hazards reached an estimated $296 bn. Insurers absorbed $129 bn of that total, leaving a protection gap of 56%, or $167 bn.
At least 58 events generated economic losses above $1 bn, with 23 of those also exceeding the same threshold for insured losses.
- When isolating weather- and climate-related events and excluding earthquakes and other non-atmospheric hazards, economic losses stood at $277 bn.
- Insured losses covered about $125 bn. The January Los Angeles wildfires again dominated insurer payouts within this subset.
Severe convective storms alone accounted for $60 bn of insured losses in 2025. Combined losses from this peril across 2023, 2024, and 2025 now total $208 bn globally, with $176 bn, or 85%, occurring in the US.
According to Beinsure analysts, this pattern has shifted convective storms into a primary annual loss driver rather than a secondary volatility factor.
The report points to climate change as an ongoing influence on weather behaviour while cautioning against assumptions of linear trends.
Hazard frequency and severity continue to fluctuate sharply by region and year. Greater variability, rather than uniform escalation, is the prevailing pattern, increasing the likelihood of clustered losses and broader societal strain.
Although more extreme event behaviour appears more frequently, Gallagher Re warned against interpreting recent years as a permanent baseline.
Investment in adaptation, mitigation, and public policy remains necessary to contain future loss volatility.
Entering 2026, the re/insurance sector holds a strong capital position. After several years of manageable catastrophe experience, total deployable capital reached a record $838 bn.
Gallagher Re’s 2026 First View Report identified average property catastrophe rate reductions between 10% and 20% for programmes unaffected by losses, while pricing held largely steady in regions that experienced material events.
The year also ranked as the third warmest on record, according to major global scientific datasets. It marked the first year since 2015 without a hurricane landfall on the US mainland.
The report also examines El Niño and La Niña effects on rapid tropical cyclone intensification, climate-related investment flows within InsurTech, and continued growth in climate litigation.
Steve Bowen, chief science officer at Gallagher Re and lead author of the report, said headline loss figures obscure uneven impacts, especially in regions where most losses remain uninsured.
He warned against complacency despite strong capitalisation, pointing to increasing interconnection between physical hazards and non-physical risk factors.
Bowen added that artificial intelligence continues to gain ground in weather and climate modelling. Gallagher Re expects AI-driven forecasting and analytics to expand through 2026 and beyond, improving the industry’s ability to process large data volumes and supporting more informed risk management decisions as volatility persists.
