Rising Climate Risks May Push 2025 Insured Losses Beyond US$150 Billion: Swiss Re

As the world continues to grapple with intensifying climate-related disasters, the Swiss Re Institute has reported a marked rise in global insured and economic losses for the first half of 2025, with warnings that the year’s total could exceed the projected US$150 billion-mark.

Swiss Re’s statistics on global insured natural catastrophe losses of $80 billion for the first half of 2025 are comparable to broker Aon’s estimate of at least $100 billion and reinsurance broker Gallagher Re’s estimate of $84 billion.

According to the institute’s latest analysis, total economic losses reached US$143 billion in the first half of 2025, a notable increase from US$130 billion during the same period in 2024. Insured losses have also risen significantly due to the increasing frequency and severity of natural catastrophes, especially wildfires and severe convective storms (SCS).

In its mid-year analysis, the institute noted that insured losses have already reached alarming levels due to a series of extreme weather events, including record-breaking heatwaves, flash floods, and rapidly intensifying tropical cyclones. 

Wildfire Losses Reach New Highs Amid Climate and Urban Pressures

Wildfires have emerged as one of the most rapidly escalating risks, driven by rising global temperatures, more frequent droughts, and altered precipitation patterns. These climatic shifts, when combined with suburban expansion and the concentration of high-value assets in vulnerable areas, have dramatically increased both the frequency and financial impact of wildfires.

“Before 2015, wildfire-related insured losses accounted for just 1% of total natural catastrophe claims. Today, that figure stands at 7%,” the Swiss Re Institute noted, pointing out that eight of the ten costliest wildfire events on record have occurred in the past decade.

Thunderstorm Losses Below Trend, But SCS Remains a Key Threat

Despite several damaging thunderstorms in the United States during the first half of 2025 — including large hail and tornado outbreaks — insured losses triggered by SCS events fell below the institute’s trend estimate of US$35 billion, and were lower than the record-breaking years of 2023 and 2024.

However, Swiss Re emphasized that SCS continues to be a leading driver of global insured losses, with annual volatility highlighting the persistent threat they pose to property and infrastructure.

With the peak of the US SCS season now past, attention is shifting toward the North Atlantic hurricane season, which historically peaks in early September. Current forecasts suggest near-to-above-average activity, with expectations of three to five major hurricanes, exceeding the long-term average of three.

Jérôme Haegeli, Group Chief Economist at Swiss Re, stressed the urgency of investing in resilience, “The strongest lever to increase the resilience and safety of communities is to double down on mitigation and adaptation. It’s here that everyone can help reduce losses before they occur. While mitigation and adaptation measures come at a price, our research shows that, for example, flood protection measures such as dykes, dams and flood gates are up to ten times more cost-effective than rebuilding.

Highlighting the insurance sector’s broader role in global risk management, Balz Grollimund, Head of Catastrophe Perils at Swiss Re, noted, “Reinsurers not only act as a shock absorber for peak risks. They also have a crucial role to help the world prepare and respond to the growing natural catastrophe risk by understanding, quantifying, and transferring the risk. Their models and tools pave the way for partnerships in public and private sectors that provide innovative, practical answers and help communities get back on their feet faster.”

According to the Swiss Re experts, the second half of the year will be critical. With the Atlantic hurricane season nearing its peak and continued risks from wildfires and flooding across multiple continents, insurers and policymakers are bracing for heightened volatility.