U.S. insurers absorbed 92% of the estimated $84 bn in global insured weather- or climate-related losses in the first half of 2025, illustrating the increasing impact of so-called non-peak perils, according to Gallagher Re Chief Science Officer Steve Bowen.
Non-peak perils accounted for nine of the ten costliest weather catastrophe losses in the period, all within the United States.
The tenth was the March 28 Myanmar earthquake, which caused $1.3 bn in losses, mainly in Thailand, Bowen stated following the release of Gallagher Re’s H1 2025 Natural Catastrophe and Climate Report Preliminary Overview.
The $84 bn estimate marks the highest first-half loss since 2011 and exceeds the prior decade’s average first-half losses by 55%.
Bowen urged the industry to stop assigning perils to categories that do not reflect their actual risk. He noted that each so-called “non-peak” or “secondary” peril has already produced at least one event with losses above $10 bn.
In the first half, wildfire—classified as a secondary peril—resulted in two such events: the $23 bn Palisades fire and the $17 bn Eaton fire, which burned extensive areas of Los Angeles in January.
Among severe storm outbreaks, the system that struck several states from March 13–16 caused the largest losses at $7.7 bn, followed by the May 14–17 outbreak with losses estimated at $2.8 bn.
Bowen argued that non-peak perils deserve more specific analysis. “You can’t tell a small Midwest carrier severe convective storms are secondary when their entire book is at risk for SCS. They are not hurricane exposed,” he said.
In response to rising severe storm losses, property insurers have raised peril-based deductibles and reduced exposure in high-risk areas. Yet aggregate insured losses continue to grow in regions with rising populations such as Texas, Bowen said, citing “a massive influx.”
Parametric insurance is gaining popularity to close protection gaps and is becoming a more attractive product to offer.
In the first half, insurers experienced twelve severe convective storm-related events with losses over $1 bn each. Combined losses for this peril are conservatively estimated at $33 bn, with loss development ongoing.
Emerging signs of higher claims costs linked to presidential tariffs. Lumber is certainly a consideration; we import a lot from Canada, but there are other materials for rebuilding or auto repairs.
The full effect of tariffs would become clearer in the second half of the year as stockpiled goods are depleted.
Despite elevated catastrophe losses, Gallagher Re reported minimal effect on the reinsurance market. Property pricing at mid-year renewals—including in Florida before the Atlantic hurricane season—declined an average 10–15%, though with localized pricing variations, the company said.
