- Insured losses from non-peak perils exceed $100 bn for the first time last year
- Cyber risks and risks posed by artificial intelligence are increasingly reshaping the risk landscape
- Understanding risks and taking preventative measures can offset the impact of loss events
Insured losses from non-peak natural catastrophes exceeded $100 bn for the first time in 2025, according to Munich Re. Losses from events such as hailstorms reached $104 bn after several years of growth.
Global insured catastrophe losses also exceeded $100 bn for the sixth consecutive year. Munich Re said medium-sized events are now producing aggregate losses previously associated mainly with major catastrophes.
Heat is becoming another source of economic loss. Severe heatwaves have caused rising mortality, while high temperatures can damage infrastructure and disrupt supply chains.
Floods and other non-peak perils also affect agriculture, healthcare and property. Munich Re noted that heat-related losses can be harder to attribute directly than damage from more visible catastrophe events.
California’s wildfires produced the largest economic wildfire loss recorded to date in 2025, reaching $54 bn. Europe also saw major wildfire activity near cities including Bordeaux, Marseille and Madrid, although large urban centres were largely spared.
Munich Re said changing catastrophe patterns are increasing the need for more detailed risk assessment and loss prevention. Reinsurance capacity remains important when insurers need to absorb losses from multiple events across different regions.
Cyber risk is another area receiving more attention. Munich Re said cyberattacks remain a major business threat, while insurance penetration remains comparatively low.
The value of reinsurance has never been more evident than it is today. A resilient reinsurance sector is capable of absorbing increasingly complex and globally interconnected risks. Offering reliable capacity underpinned by our exceptional financial strength, outstanding expertise and innovative solutions, we create stability, facilitate investment and support recovery following major loss events. These criteria are crucial to long-term economic resilience and the insurability of risks.
Thomas Blunck, Member of the Board of Management of Munich Re
Its research found that 89% of companies don’t believe they are adequately protected against cyber risk. The company pointed to more professional attackers and growing use of AI as factors making cyber threats harder to assess.
AI-related insurance remains less developed than cyber cover. Munich Re said demand is increasing, but policy wording and modeling approaches still need further development.
The company also said diversification remains important as market conditions vary across regions and business lines. Available reinsurance capital has increased by an average of 5.8% annually over the past eight years.
Volatility is not a temporary phenomenon. Our mission is to pool our expertise, capacity and innovative strength to help our clients remain resilient, adapt successfully to change and navigate the new risk landscape with confidence. And regardless of market cycles, this remains true: we are there for our clients – especially when they need us most.
Stefan Golling, Member of the Board of Management of Munich Re
Munich Re said it continues to focus on portfolio quality and profitability when available capital exceeds demand. During harder market periods after major losses, the company aims to maintain capacity where possible.
