Catastrophes: insured losses on trend to USD 145 billion in 2025

Global insured losses from natural catastrophes reached USD 137 billion in 2024. Among a multitude of perils, the disasters contributing most to the accumulation of losses were hurricanes Helene and Milton, severe convective storms (SCS) in the US, large-scale urban floods around the world and the highest ever recorded natural catastrophe insured losses in Canada.

Figure 1: Natural catastrophes in 2024: in a nutshell

Economic losses from disaster events in 2024 were USD 318 billion, of which 57% were insured. That left a still large global protection gap of USD 181 billion.

Figure 2: Global natural catastrophe insured and uninsured losses, share of insured losses (USD bn, 2024 prices)

Global insurance losses from natural catastrophes continue to follow the 5-7% annual growth rate (in real terms) that has been the norm of recent years. If the trend holds, insured losses will approach USD 145 billion in 2025.

Figure 3: Growth in global natural catastrophe insured losses (USD bn, 2024 prices)

As has been the case in recent years, in 2024 most of the global insured losses were driven by secondary perils, in particular SCS. However, primary perils (tropical cyclones and earthquakes) still hold most loss potential. This as demonstrated by the five so called "peak loss" years that have occurred in the last 30, when annual losses were way above trend. The last peak loss year was 2017, when hurricanes Harvey, Irma and Maria drove global insurance losses to 111% above trend.

In years that losses are close to trend, primary insurers cover the majority of property claims. In this context, this sigma affirms the utility of reinsurance. That is, when major disasters strike and losses soar well above trend, reinsurers step in to cover more than half of the losses in excess of trend. 

Using Swiss Re’s suite of catastrophe risk models and in-house knowledge of market exposures, we estimate a 1-in-10 probability that global insured losses could reach as high as USD 300 billion this year, making what would be the next peak loss year.

Figure 4: Global natural catastrophe insured losses, the trend and modelled 1-in-10 year (USD bn, 2024 prices)

The reinsurance market is well able to absorb peak loss scenarios today, including the 1-in-10 chance that insured losses this year rise to USD 300 billion or more. Global traditional reinsurance capital is currently estimated to be around USD 500 billion. Alternative capital, including an estimated USD 50 billion from the cat bond market, contributes additional capacity to help cover a loss of this magnitude.

But that is no reason for complacency. To sustain its risk transfer function, reinsurance capital needs to keeps pace with rising natural catastrophe exposures, and earn its cost of capital over a longer time period.