Swiss Re Warns of $300 Billion Peak-Year Losses as Climate Risks Escalate

Zurich (Swiss Re) – Global insured losses from natural catastrophes could surge to $145 billion this year, continuing the long-term annual growth trend of 5–7%, according to the Swiss Re Institute’s latest sigma report. The rise is driven primarily by secondary perils such as severe thunderstorms, floods, and wildfires. However, the most severe threats still stem from primary perils like hurricanes and earthquakes, which have the potential to push insured losses beyond $300 billion in a single peak year.

Already in 2025, the year began with significant financial strain as wildfires in Los Angeles triggered an estimated $40 billion in insured damages—highlighting how destructive secondary perils can be. Yet, the biggest financial shocks come when major hurricanes or earthquakes strike densely populated areas. In such events, losses can more than double the global average trend, Swiss Re warns.

The report notes that since the last major peak year in 2017 driven by Hurricanes Harvey, Irma, and Maria—the accumulation of both secondary and primary peril events has steadily intensified. Models show that historical hurricanes such as Andrew would result in losses more than triple today due to inflated asset values and denser populations in vulnerable regions.

CEO of Property & Casualty Reinsurance at Swiss Re, Urs Baertschi emphasized the reinsurance industry’s critical role in helping clients understand evolving risks. “In addition to helping clients with traditional risk transfer, reinsurers also provide data, risk insights and knowledge about where dangers lie. The reinsurance industry is a shock absorber when danger materialises into disaster and an essential discussion partner around risk awareness and risk prevention.”

Conversely, not all exposure has grown uniformly. Hurricane Katrina, still the costliest single insured event in the industry’s history, would cause approximately $100 billion in losses if it struck today—similar in value due to higher housing and construction costs, but moderated by improved flood defences and a 20% population decline in affected areas.

The firm’s Group Chief Economist, Jérôme Haegeli, stressed that capital adequacy in the reinsurance sector is paramount. He also emphasized the necessity of coordinated efforts between governments and insurers to implement long-term protection strategies.