Natural disasters pose a challenge for the insurance industry, losses may reach $145 billion in 2025
Climate change: According to the latest report of leading global reinsurance company Swiss Re, the amount of insured losses due to climate-related disasters in the year 2025 may reach $145 billion. This potential loss is about 6 percent more than the insured loss of 2024 ($137 billion).

The rising frequency and severity of natural disasters are a growing headache for insurance companies. Swiss Re in its most recent annual review has reported that the global insured losses due to climate-driven disasters in 2025 are projected to reach $145 billion. That would be about a 6% higher insured loss than in 2024 ($137 billion).
According to the report, if we look at the data of the last few years, the insured loss due to disasters is increasing at the rate of 5 to 7 percent annually, which is a danger signal not only for insurance companies but also for global financial stability. If the situation remains the same, then there will be the second-largest annual insurance loss after 1990. However, the storms Harvey, Irma, and Maria in 2017 gave the biggest blow till now. According to Swiss Re's disaster risk model, the figure of insurance claims can reach $ 300 billion in 2025, although its probability is considered to be around 10 percent.
Natural disasters caused a total economic loss of $ 318 billion globally in 2024, but only 57 percent of it, i.e., $ 181 billion, could be compensated by insurance. The remaining loss remained unsecured, which clearly shows that even now, a large number of individuals and businesses are deprived of insurance protection. In 2024, storms Helen and Milton caused massive destruction. Severe storms in the US, global urban floods, and the largest ever insurance claims in Canada made this year special in insurance history.
According to the report, extreme weather events have also led to a change in the strategy of the insurance industry. No,w companies have started shying away from issuing policies in high-risk areas. For example, the devastating forest fire of 2024 in Los Angeles destroyed 23,000 hectares of land. It claimed 29 lives and destroyed more than 16,000 structures. Due to this, about a dozen major insurance companies in California either stopped issuing new policies or imposed strict conditions on them.