Insured losses from natural catastrophes now consistently exceed $100bn per year, says Willis in its “Natural Catastrophe Review – Expert insights, lessons learned and outlook, January – June 2025” report.
In the previous decade, high loss years (2011 and 2017, most prominently) were intermingled with ‘quiet’ years with moderate or low losses. It’s now been six years since the insurance industry last experienced a quiet year for natural catastrophe. Events so far in 2025 indicate that streak will continue for at least one more year.
Savage wildfires wreak havoc
In January 2025, wildfires spread across Los Angeles, razing more than 18,000 homes and buildings and at least 29 people killed — one of the worst catastrophes in California’s history. Wildfire also continues to be an emerging concern in many other parts of the world. Already this year, Japan and South Korea have experienced the worst wildfires in at least a generation.
Longer, hotter fire seasons combined with expanded urban development hint at the strong potential for larger insured losses in the future. In Canada, wildfires have burned more than 4.6m ha, caused the evacuations of tens of thousands of people, and sent unhealthy air across the central and eastern part of the country and the US next door.
Water remains a major gap for insurance
After two years in a row with insured losses in excess of $50bn, no one can consider severe convective storms (SCS) in the US as a “secondary” peril. The combination of explosive growth in exposure and more favourable environments for storm genesis has raised SCS losses to be roughly equal to losses from hurricane damage over the same time frame.
Through the first half of the year, 2025 ranks as the second- or third-most active year on record for local reports of damaging winds and tornadoes, respectively. Hail reports have hewed close to the long-term average, with large hailstones reported in Texas, Oklahoma, Minnesota and Wisconsin In addition to direct damage from strong winds and hail impacts, severe convective weather can also serve as the trigger for extreme or widespread flooding.
Recent cyclones not unprecedented but still out of the ordinary
Although worldwide, the Northern Hemisphere summer is the main period for tropical cyclone activity, 2025 has already proven to be a busy year.
The Pacific hurricane season has gotten off to a fast start, including the earliest hurricane to ever make landfall in Mexico (Hurricane Erick on 19 June). In the southwest Indian Ocean, the 2024-25 cyclone season was the third-busiest since records began in 1967 and extremely destructive, mainly due to the damaging effects of Cyclone Chido in Mozambique, Malawi and Mayotte. And the Australian region experienced its most active cyclone season since 2005-06, ending the streak of 18 consecutive years of either average or below-active cyclone activity.
Historically, cyclone landfalls in Australia are concentrated along the country’s northern coast. But for the first time in 50 years, a tropical cyclone made a southerly landfall near Brisbane and the Gold Coast. Cyclone Alfred caused an estimated A$2.6bn ($1.7bn) in insured losses, perhaps amplified by a lack of recent experience with tropical storms and lower standards for wind resistance for new construction. Willis expects climate change will allow tropical cyclones to push farther south.
The long reach of seismic waves
Sudden movements of the Earth’s surface do not occur as commonly as weather-related hazards. Even so, their effects cannot be overlooked, particularly because of their potential to cause significant damage at distance. The Mw7.7 earthquake that struck Myanmar on 28 March caused the deaths of more than 5,000 people, making it the deadliest seismic event to affect the country since 1930.
The earthquake also triggered strong shaking in Bangkok, Thailand, more than 1,000 km from the epicentre. M