Understanding Insured Losses From Climate Events

𝐒𝐮𝐦𝐦𝐚𝐫𝐲 𝐨𝐟 𝐒𝐰𝐢𝐬𝐬 𝐑𝐞 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐒𝐢𝐠𝐦𝐚 𝐑𝐞𝐩𝐨𝐫𝐭 𝐍𝐨. 1/2025: 𝐍𝐚𝐭𝐮𝐫𝐚𝐥 𝐂𝐚𝐭𝐚𝐬𝐭𝐫𝐨𝐩𝐡𝐞𝐬 Swiss Re just published their Sigma No. 1/2025 report on global natural catastrophe losses. The document provides a comprehensive overview of insured and economic losses in 2024 and outlines projections for 2025. This report provides a detailed overview of global insured losses from natural catastrophes in 2024 and presents expectations for 2025. It highlights the persistent upward trend in disaster losses and underlines the critical role of insurance and adaptation in managing these escalating risks. 𝐒𝐞𝐯𝐞𝐫𝐚𝐥 𝐬𝐭𝐫𝐢𝐤𝐢𝐧𝐠 𝐟𝐢𝐠𝐮𝐫𝐞𝐬 𝐚𝐧𝐝 𝐭𝐫𝐞𝐧𝐝𝐬 𝐬𝐭𝐚𝐧𝐝 𝐨𝐮𝐭: (You can also download the report and skim it through for additional details and data.) > In January 2025 alone, wildfires in Los Angeles County generated a record USD 40 billion in insured losses, which made this already the costliest wildfire year on record. > Severe convective storms in the US were again a major driver of loss, contributing USD 53 billion globally, the second-highest ever for this peril. > Flood losses have also been rising. The 2024 flood in Valencia, Spain, caused USD 4.7 billion in insured damages (the largest ever flood-related insurance loss in the country). > The protection gap remains significant: more than 57% of total catastrophe losses worldwide were uninsured. These numbers highlight the intensifying impact of climate-related hazards. Wildfires, floods, hurricanes, and severe storms are becoming not only more frequent but more costly. For example, warming temperatures and drier conditions have extended fire seasons and fueled record wildfire losses in California, while heavier precipitation events have overwhelmed flood defenses across Europe and the Middle East. In a world where a single event can cause USD 100 billion or more in insured losses, understanding the dynamics of natural hazards and how they intersect with societal vulnerabilities is essential. The findings reinforce that preparing for, mitigating, and financing the risks of climate hazards will be critical to maintaining the stability of insurance markets and protecting communities from escalating impacts. #NaturalHazards #Catastrophes #NatCat #HydroclimateExtremes

sigma 1/2025: Natural catastrophes: insured losses on trend to USD 145 billion in 2025 Rising Losses from Natural Disasters: Global insured losses from natural catastrophes may reach USD 145 billion in 2025, mainly due to secondary perils like wildfires, floods, and thunderstorms. 2024 losses confirm the long-term annual growth trend of 5-7% for global insured natural catastrophe losses.   Primary Perils Pose Peak Risks: #Hurricanes and #earthquakes could drive global losses to over USD 300 billion in a peak year, particularly if they hit densely populated areas. We assess a 1-in-10 probability of this happening in any given year. 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. US Disproportionately Affected: The US accounted for nearly 80% of global insured catastrophe losses in 2024, with states like Florida and California particularly vulnerable.   Major Hurricanes in 2024: Hurricanes Helene and Milton were the largest insured loss events in the US, causing a combined USD 44 billion in insured losses and USD 112 billion in economic losses, highlighting a large protection gap, especially in flood-prone areas like Appalachia with low insurance uptake.   Low Flood Insurance Coverage: Regions hit hardest by Helene, such as Buncombe County, NC, had less than 1% coverage under the National Flood Insurance Program (#NFIP). Overall, flood insurance penetration in Georgia, North Carolina, and South Carolina remains very low.   Severe Convective Storms Dominate US Losses: The US continues to see the highest SCS-related insured losses globally, with 2024 marking the second year in a row above USD 50 billion in losses. These events are now the primary cause of billion-dollar disasters in the US.   US Leads in Billion-Dollar Loss Events: The US has experienced the most insured catastrophe events exceeding USD 1 billion, far surpassing other regions. These are primarily driven by SCS and hurricanes, reflecting the country's high exposure and concentration of valuable assets.   High Exposure to Peak Loss Scenarios: The US remains at significant risk of "peak-loss years" driven by primary perils such as major hurricanes and earthquakes. For example, a Category 5 hurricane hitting Miami could lead to a dramatic spike in insured losses, potentially doubling trend levels.   Read more in our latest sigma: https://lnkd.in/eiq7itmy

It's finally here. Proud to announce the launch of the Gallagher Re's Natural Catastrophe and Climate Report: 2024. https://lnkd.in/gMST_MnU This report provides a robust view on natural perils, climate change, and sustainability issues. The document not only provides a wealth of valuable data, statistics, insights, and trend analyses, but also offers deeper dives into specific topics that are not only relevant to the insurance industry but also for a much broader swath of public and private sector interests. One particular in-depth area of focus in this year's report is an analysis of the ongoing drivers of US severe convective storm (thunderstorm) losses. 2024 was a costly, impactful, and meteorologically record-setting year. We saw a continuation of US SCS outbreaks leading to sizeable losses. The impact of several significant tropical cyclone landfalls (Helene, Milton, Yagi, Chido -- among others). The dichotomy of catastrophic flood events (UAE, Spain, Brazil, Germany, China) along with major drought conditions across swaths of continental regions (Americas, Europe, Africa). All of this occurred in the context of 2024 being the warmest year ever recorded. We're now witnessing multiple global agencies showing annual temperature anomalies running beyond the 1.5°C pre-industrial baseline (1850-1900). While we'd need to see this averaged over a full climatological average cycle (30 years) to officially surpass the Paris Agreement benchmark, it is psychologically a big deal to see land / ocean temperatures now start to creep up to and exceed this threshold. Perhaps the biggest takeaway for 2024 was the significance of billion-dollar insured loss events occurring in non-traditional high loss catastrophe regions of the world. Society tends to gravitate towards focusing on the most highly populated and economically mature regions of the world for catastrophe risk, but the events of 2024 show we are now witnessing the growing vulnerabilities and swings in volatility everywhere. We're already off to an exceedingly active start to 2025 with the wildfire outbreak in Southern California. What will the rest of 2025 bring? Stay prepared and know your risk. Huge thanks to my co-authors Brian Kerschner and Jin Zheng Ng for their work on this report. Additional kudos to Marie Ekstrom, Zahra Jasmin-Uddin, and Kathryn Couperwhite. And finally, major thanks to Eileen Shannon, Julia Lane, and several others on the Gallagher Re marketing team for getting this report out the door.