How wildfires and storms drove insurance losses in 2025
Multiple
Authors, Carbon
Brief
The Los
Angeles wildfires alone caused record-high $40bn in insured losses
from fires, says a new report from
reinsurance company Swiss Re.
The report notes that, while overall insured losses in 2025
were lower than previous years, this was due to a “[luck] rather than a
reduction in risk”, partly due to no major
hurricanes hitting the US.
Insured losses refer to damages that are compensated for by
insurance companies.
Despite lower losses in 2025 than the trend over recent
years, they are still rising by an average of 5-7% each year since 1996,
accounting for inflation, says Swiss Re.
The report itself does not explicitly discuss the role of
human-caused climate change in the events driving these losses.
But the extensive ways in which climate change exacerbates
and drives extreme weather are well established in scientific
literature.
Other reports and media coverage also show how some parts of the world hit by frequent and intense extreme weather now face the possibility of becoming “uninsurable” due to unaffordable premiums or insurers pulling out of the market.
Below, Carbon Brief outlines three charts from the new Swiss
Re report that highlight the role climate extremes had on insured economic
losses in 2025.
- Most
insured losses came from wildfires, storms and floods
- Wildfire
losses soared to record-highs in 2025 due to the Los Angeles fires
- Losses
are rising from thunderstorms – partly due to cost of replacing damaged
rooftop solar panels
Most insured losses came from wildfires, storms and
floods
The report finds that wildfires, floods and other “secondary
perils” accounted for 92% of the $107bn in insured losses from “natural
catastrophes” in 2025.
This is an all-time high for “secondary peril” losses and an
increase from 56% over 2015-24 on average.
Percentage
of insured economic losses driven by primary perils (tropical cyclones (black),
winter storms (dark grey), earthquakes (light grey) and secondary perils
(floods (dark blue), convective storms (medium blue), wildfires (light blue)
and other (pale blue) for 2025 and as decadal averages over 1995-2024. The
2015-24 figure amounts to 101% due to rounding. Source: Swiss Re (2026)
Secondary perils refer to
more frequent, but typically less-damaging events, such as thunderstorms,
floods, droughts, wildfires and snow. “Primary perils” are less frequent, but
highly-damaging events, such as earthquakes and tropical cyclones.
Secondary events have been the fastest-growing category of
insured losses from “natural” catastrophes over the past 55 years, according to
the report.
The scientific field of “attribution”
shows how global warming is making many of these events occur more frequently
and/or with greater severity.
Thunderstorms, wildfires and floods are causing “rapidly
growing insured losses with widely varying drivers worldwide”, says the Swiss
Re report.
Although overall insured losses decreased to $107bn in 2025
from $137bn in 2024, the report forecasts that they could increase to $148bn in
2026, if the year aligns with long-term trends – or $320bn, if major events
occur.
Insured losses only account for part of the wider economic
losses from weather events, however, with less than half of losses being
covered by insurance, the report says.
It adds that emerging economies have the largest gaps in
insurance protection.
One contributing factor to the drop in insured losses
between 2024 and 2025 was that no major hurricane made landfall in the US,
where many people have insurance coverage for their homes or businesses.
Tropical cyclones accounted for 39% of these losses on
average over 2015-24, compared to just 5% in 2025.
Hurricanes did cause destruction in other countries with
lower insurance protection in 2025, however, such as Hurricane Melissa in Jamaica.
The US has the largest insurance
market in the world, in part due to the predominance of high-value assets when
compared to other countries. As such, a hurricane not making landfall in the US
brings down the overall total insurance losses more significantly than it would
in other countries.
Globally, “growth in exposure” contributes to more than 80%
of the increase in weather-related insurance losses since 1970, says Swiss Re.
This is the term used by the insurance industry to refer to increasing
vulnerability to losses amid rising risks.
The report adds that better modelling and improved
adaptation and mitigation measures are “crucial” to reduce losses and maintain
insurability in vulnerable areas.
Dr Balz
Grollimund, who leads the company’s catastrophe model development, told a
press briefing:
“We need to continue reviewing our models, our risk views
and updating them so they are not anchored in the past. We want them to be
anchored in the present day [and] the next couple of years, so we can really
anticipate the risk that we are facing.”
Despite the known link between increasing extreme weather
and climate change, the new Swiss Re report only mentions climate change in
footnotes or in reference to climate modelling.
In contrast, the company’s 2025 “natural
catastrophes” report explicitly mentioned climate change compounding losses and
heightening extreme weather events at least six times.
Wildfire losses soared to record-highs in 2025 due to the
Los Angeles fires
The Palisades
and Eaton wildfires that ripped through parts of Los Angeles in
January 2025 resulted in almost $40bn of insured losses – “by far the largest
global insured wildfire loss events to date”.
The majority of insured losses from wildfires almost always come from the US, as the chart above shows. Insured losses from wildfires ($bn) in the US (dark blue) and the rest of the world (light blue) over 1996-2025. Source: Swiss Re (2026)
Globally, wildfires burned at least 3.7m square kilometres
of land – an area larger than India – over 2024-25, Carbon
Brief previously reported.
Extreme events occurred in South American and African
rainforests during this time, but these would not rank in insurance industry
figures due to low or non-existent insurance cover.
The report notes that “high hazard intersects with high-value assets”
in many parts of California, which contributed to the record-high losses in the
state.
Typically, extreme weather events in global north countries
cost more for insurance companies due to higher levels of insurance
protection.
Insurance company Mapfre estimated
that around 17% of losses from “natural” disasters are covered by insurance in
Asia and 19% in Latin America. This compares to almost 57% in North
America.
The total economic losses from the Los Angeles fires were
estimated to cost $250bn-275bn, said the UN
Office for Disaster Risk Reduction. Other impacts from the fires include
job losses, health impacts from the smoke and damage to ecosystems, they
noted.
The weather conditions that drove the Los Angeles fires were
estimated to be 6% more intense and 35% more likely as a result of human-caused
climate change, according to World
Weather Attribution.
Losses from wildfires have risen “markedly” over the past
decade, notes Swiss Re. Global insured losses from fires are increasing by
around 12% each year.
The report adds that wildfires have accounted for an average
of 10% of global annual “natural” catastrophe insured losses since 2015,
compared to just 2% before 2015.
It also finds that the risk of wildfire losses in the US has
been heightened by patterns of population growth. The increase in population in
high-risk wildfire zones has been three times higher than the wider US since
1975, says the report.
Losses are rising from thunderstorms – partly due to cost
of replacing damaged rooftop solar panels
Severe convective storms – also known as thunderstorms –
resulted in $51bn of insured losses in 2025, Swiss Re finds, which is above the
long-term trend.
These storms are severe events that can bring thunder,
lightning, heavy rainfall, hailstones, strong winds and sudden temperature
changes, according to the Royal
Meteorological Society.
Insured losses ($bn) from severe convective storms globally over 1996-2025. The grey line indicates the estimated 7% growth anticipated each year, based on long-term trends, accounting for inflation. Source: Swiss Re (2026)
The rain from these storms tends to be very intense and
localised in one area, the organisation notes, which can lead to “devastating”
floods.
Climate attribution studies have shown that storms have
often been made more severe or likely to occur due to climate change, as Carbon
Brief’s interactive map reveals.
However, attribution of highly localised convective storms
is “extremely difficult”, notes the Intergovernmental
Panel on Climate Change. It adds that there is “limited evidence” that
extreme rainfall associated with these storms has increased “in some cases” as
a result of climate change.
This type of storm has caused up to €50bn ($58bn) in
economic losses in the EU since 2000, with Germany, France and Ireland
worst-affected, according to a recent report from
property data company Cotality.
Globally, 2025 was the third-costliest year for these
storms, says Swiss Re, after 2023 ($72bn) and 2024 ($54bn).
One notable contributing factor to this $51bn cost is
repairing damage to rooftop solar
panels after hailstorms, the report says.
In 2024, the Guardian reported
that large hailstones threaten solar infrastructure, with hail in Italy and
Germany up to 10cm in size – large enough to “dent a car, smash greenhouses and
break a solar panel”.
Grollimund from Swiss Re said that major hail incidents with
“tennis ball-sized” hailstones appear to be increasing.
The report says that hail events with stones larger than 5cm
are increasing most intensely in Europe, especially in northern Italy.
This is driven by “rising low-level moisture and increasing atmospheric
instability”, it says.
Hailstones can crack the front glass on a solar panel and cause other damage that can reduce its lifespan and yield, according to a 2019 report from researchers at VU Amsterdam.
