Preliminary total global insured losses from the first half of 2025 are estimated at $84 billion, 55% higher than the decadal average of $54 billion, according to Gallagher Re’s recently published “H1 2025 Natural Catastrophe and Climate Report.” The number marks the costliest first six months of a year for the insurance industry since 2011 ($136 billion), driven by the U.S. wildfires in January and U.S. severe convective storm (SCS) activity, which together add up to 87% of total H1 insured losses worldwide.
Recent Munich Re and Swiss Re estimates are slightly more conservative, estimating insured losses to be around $80 billion, driven mainly by wildfires in the U.S. Munich Re claims that insured losses were the second-highest in the first half of any year since the company’s records began in 1980, noting that “only in the first half of 2011 were insured losses even higher, attributable to a severe earthquake and destructive tsunami in Japan.”
Apart from U.S. wildfire and SCS losses, the rest of the world experienced notably below average activity, states Gallagher Re. “Non-U.S. insured losses were less than $10 billion, so that H1 2025 became just the second H1 since 2006 to fall short of that threshold (2017 was the other year). The costliest non-U.S. event was the Myanmar Earthquake, which also caused notable damage in Thailand.”
Swiss Re reports that if the current trends hold, insured losses from natural catastrophes in 2025 will likely approach $150 billion. The Gallagher Re report, meanwhile, estimates that 2025 is “on a clear path to surpassing $100 billion in insured losses for the 12 months.” However, it notes that “the industry remains healthy and in a good position to handle this level of annual loss,” and that H1 2025 has been “highly manageable for governments and the insurance industry.”
CLM fellow Patrick Milone, property claims manager, Claims Administration Corporation, paints a contrasting picture regarding how government agencies have handled recent disasters. “If you look at the history of the significant natural disasters that have occurred over the last few years, [such as the California] wildfires, [Texas] flooding, coastal wind surges, and tornadoes, both federal and state government agencies were slow to respond, and in some cases did not respond at all. This lack of response…not only increases extensive property damage, but loss of life as well,” he explains.
Wildfire Insured Losses
“Wildfires in the greater Los Angeles area resulted in the costliest natural disaster during the first six months of 2025,” states Munich Re. “Moreover, they occurred in winter, which is typically rainy. The overall loss is estimated at $53 billion, around $40 billion of which was insured.”
These losses were nearly double the global wildfire losses in 2018, which had previously been the costliest wildfire year. Munich Re notes that studies indicate climate change is increasing wildfire risk by elevating the frequency of conducive condition. While rainy season in California typically begins in October, there was very little rain in 2024. Further, after the dry phase that continued into early 2025, an excess of highly flammable brush fueled the wildfires, whereas the typical amount of precipitation would have allowed vegetation to grow and flourish. “Exacerbated by California’s strong winter winds, known as the Santa Ana winds, the conditions constituted a textbook scenario for wildfires,” the report states.
In countries like Canada, wildfire trends are also shifting. In the view of Colin Young, building consulting – Canada operations lead, J.S. Held, “The most notable shift in catastrophe trends during the first half of 2025 has been the increased frequency and severity of wildfires, particularly across several Canadian regions. Over the past two years, we’ve seen a consistent rise in wildfire activity, especially in the Prairies and Northern British Columbia.”
What is different this year, Young notes, “is the expansion of wildfire risk into areas that have historically seen less activity, including Northern Ontario, Québec, and parts of Newfoundland. This shift appears to be driven by extremely dry conditions across much of the country, with numerous regions currently under fire bans to mitigate ignition risks. This marks a departure from previous years, where flooding, wind, and rain events were the primary contributors to catastrophic claims.”
SCS and Weather-Related Insured Losses
Munich Re reports that “weather disasters caused 88% of overall losses and 98% of insured losses, while earthquakes accounted for 12% and 2%, respectively.” The U.S., according to Gallagher Re, has had 13 billion-dollar events with all but one being SCS-related.
“U.S. SCS outbreaks are currently averaging [$]1 billion each, which would make 2025 just the fourth year in which this has happened,” states Gallagher Re. “The costliest SCS outbreak was the March 13-16 sequences, which at nearly [$]33 billion became the fourth-costliest outbreak for insurers on record,” behind 2024 ($49 billion), 2023 ($48 billion), and 2011 ($38 billion). The March outbreak consisted of at least 118 tornado touchdowns.
Hail-related claims also drove large insured losses in the U.S., notes the Gallagher Re report, citing “supercells (rotating storms) that traversed parts of central and northern Texas [and] caused significant hail damage in heavily populated regions near Austin (May 28) and Fort Worth (June 1).” Hail continues to be the “dominant driver” of U.S. insured SCS losses, accounting for 50-80% of overall peril claims annually.”
Emily Wohlfarth, director of operations, forensic architecture & engineering, J.S. Held, points toward the fact that, regionally, “the Southeast and lower Mid-Atlantic, including regions of North Carolina and the Gulf Coast of Florida, but particularly the mountain regions of the Carolinas…have seen an increase in catastrophic events, namely flooding due to hurricane and storm activity.” She also notes the increase in seismic events across the Western region, including California and Utah.
From a property insurance perspective, Milone notes that, “in respect to high wind driven storm surges, unless the affected property owners carry flood insurance, their respective insurance policies will not respond to these losses. The cost of flood insurance is extremely high and, in most cases, where properties are mortgaged, the financial institutions require the property owner to carry the necessary flood coverage. As a result of the high cost and, in some cases, the lack of insurance, the country has seen an increase of migration from these coastal areas typically affected by this activity.”
Jon Held, CLM fellow and executive chairman of the board, J.S. Held, notes that both “Wildfires and floods can create further complications resulting from damages to infrastructure needed to replace real property. This can often have a profound effect on the period of restoration of damaged property.”
Economic Losses
“The minimum [$]151 billion in economic losses from all natural perils was above the 10-year [(2015-2024)] H1 average ($144 billion),” according to Gallagher Re. The majority ($111 billion) of the losses came during the first three months of the year, driven mainly by the two historic wildfires in Los Angeles in January and aggregated SCS throughout the U.S. “Q2 2025 by itself only produced an estimated $40 billion in global economic losses, which was the lowest April/May/June stretch since 2005 ($29 billion in today’s dollars).” The total global H1 economic loss solely from weather/climate events was $134 billion.
Gallagher Re explains, “When looking solely at weather or climate direct loss costs, which means excluding losses associated with earthquakes, volcanoes, or other non-atmospheric driven events, the economic cost was minimally tallied at [$]134 billion. This was slightly above the decadal average ([$]126 billion).” Insurers covered at least $81 billion, which was 59% above the decadal average of $51 billion.
Throughout the rest of the globe, economic losses in the first half of the year have largely been manageable, states Gallagher Re. The largest non-U.S. event was the catastrophic Mw-7.7 earthquake in Southeast Asia, with an epicenter in Myanmar but whose impacts spread well into parts of Thailand and cost an estimated $14 billion in economic damage. In total, there were at least six other billion-dollar events outside of the U.S.
Climate Trends
According to Gallagher Re, global surface land and ocean temperatures in the first half of 2025 were the second warmest on record. NOAA’s National Centers for Environmental Information (NCEI) reports that “the combined land and ocean temperature anomaly for the first six months of 2025 was +1.21°C (2.18°F) above the 20th Century Average.”
The World Meteorological Organization (WMO) released a report noting “the likelihood of the average global temperature anomaly for the period 2025-2029 exceeding 1.5°C (2.7°F) above the Pre-Industrial Baseline had risen to 70%. This was a large increase from last year’s 2024-2028 projection of 47%.”
Looking ahead, the Gallagher Re report notes that the peak of tropical cyclone season is arriving in the Atlantic, with the National Oceanic and Atmospheric Administration (NOAA) “indicating that ENSO-neutral conditions are likely to remain through the end of 2025. Colorado State University [(CSU)]…is forecasting a near to slightly above average Atlantic season. This comes as NOAA also projects that 2025 has a 99% chance of ending as one of the Top 5 warmest years on record.”
Action and Prevention
John Peiserich, Esq., executive vice president, environmental, health & safety practice lead, J.S. Held, emphasizes, “As claims grow in both number and value, insurers need to better understand the location risks associated with policies. We routinely use big data sets to create climate risk data packages associated with climate-related environmental perils. Undertaking data analysis, developing advanced environmental peril visualizations—which helps evaluate portfolio risk—and using that information to conduct risk assessment will be critical for insurers. Looking across product lines to assess total exposure will involve exercising large data sets and experienced risk assessors.”
Peiserich also stresses the importance of collaboration between insurers and insureds to plan for environmental perils. “Advanced risk management by the insured through supply chain improvements, infrastructure resiliency improvements, or operational adaptation when incentivized by the insurers provides risk reduction opportunities for both parties.”
Milone adds that federal and state agencies must enforce preventative measures or take action to minimize exposure to save property and lives. For example, he explains, “Both New York and New Jersey responded to the effects of Sandy by constructing more sea walls, trimming trees close to overhead electrical and communication wires, and revising and implementing and/or revising their respective Emergency Response Procedures.”
Furthermore, Milone continues, “Insurers need to re-think their methodology of handling these high-risk CAT losses by reviewing their methods and guidelines for handling such losses, engag[ing] qualified adjusters who can respond and efficiently handle these losses, and be[ing] prepared for effecting quick turnaround in resolving these matters in a timely and professional matter.”