Gallagher Re says 2025 has been a quieter year for natural catastrophes, but warns the industry against thinking volatility is easing.
In its Q3 2025 Natural Catastrophe and Climate Report, the broker noted insured losses of about $15 bn for the quarter, the lowest since 2016, with global 9M 2025 insured losses of $105 bn, or 8% below the decade average.
Yet that figure still marks the sixth year in a row where losses topped $100bn. Economic losses from January through September were estimated at $214bn, well under the decadal average of $338bn.
- Preliminary Q1-Q3 global economic and insured loss totals from all natural perils
- A review of the low third-quarter catastrophe activity and an appendix update showcasing revised losses from earlier Q1 / Q2 events
- Insights into record-breaking global heat and its growing implications for health infrastructure and insurance protection gaps
- A regional overview of major events including U.S. severe convective storm season, monsoon flooding in Asia and European wildfire activity
- A discussion on the recent transition from ENSO-neutral conditions to La Niña and what that might mean in the coming months
Q3 produced less than $50bn in total losses, the lowest third-quarter result since 2006, even though Q3 is typically the most expensive stretch of the year.
The outliers remain large: the Palisades and Eaton wildfires in California together generated $65bn in economic damage and $40bn in insured losses, while the U.S. alone registered 18 separate billion-dollar events, mostly from severe convective storms.
Beyond the U.S., the most costly non-U.S. event was a $15bn earthquake centered in Myanmar.
The report highlighted climate signals as well. Global surface and ocean temperatures through September ranked as the second warmest on record.
Gallagher Re said extreme heat presents risks that still sit outside standard catastrophe modeling, including grid failures, data center exposures, soil subsidence, and broader heat stress impacts.
The firm called on carriers and reinsurers to invest in advanced analytics and bespoke frameworks to avoid blind spots.
Steve Bowen, Gallagher Re’s chief science officer, said the year has been “top heavy,” with just five events accounting for more than half of global insured losses.
He added that the industry should brace for ongoing volatility, with rare events potentially becoming less rare as hazard behavior shifts.
2025 has continued to be a ‘top heavy’ year with the Top 5 costliest events accounting for 54% of all global insured losses alone.
Steve Bowen, Chief Science Officer at Gallagher Re
“If the last three months of 2025 stay manageable and on par with recent historical loss performance in Q4, this will likely be a further boost to the (re)insurance industry’s financial buffers,” Steve Bowen said.
Comparing recent data, Bowen pointed to a 5-year average annual insured loss of $155bn versus $135bn over the past 10 years, a clear upward drift.
If Q4 stays calm, reinsurers could see balance sheets fortified heading into 2026.
Yet Bowen cautioned: extreme events are intensifying, geographic patterns are shifting, and the long-term trajectory points to higher losses regardless of any single quiet quarter.
