Secondary Perils Drive Record 92% of 2025’s $107bn Global Insured Losses: Swiss Re

Why It Matters

The shift toward secondary perils highlights growing vulnerability of built assets and underscores the need for stronger risk mitigation and insurance capacity, affecting reinsurers, insurers and policy‑makers worldwide.

Key Takeaways

• Secondary perils caused 92% of 2025 insured losses.
• Wildfires contributed $40B, largest on Swiss Re sigma record.
• Severe convective storms added $51B, third‑costliest year.
• Flood losses fell to $3.4B, far below five‑year average.
• Insured loss trend up 5‑7% annually, urging risk adaptation.

Pulse Analysis

The Swiss Re 2025 catastrophe report marks a turning point in the global loss landscape. While total insured losses fell short of the long‑term average, secondary perils—severe convective storms, wildfires and, to a lesser extent, floods—dominated the picture, representing 92 % of the $107 billion payout. The Los Angeles wildfires alone accounted for $40 billion, and convective storms contributed $51 billion, pushing the year into the top three costliest for storm events. This concentration reflects a broader shift as climate‑driven weather extremes become more frequent and intense, eroding the historical dominance of hurricanes in loss calculations.

For insurers and reinsurers, the data signals a rebalancing of underwriting portfolios. Traditional models that weighted hurricane exposure heavily must now incorporate higher frequencies of inland storms and fire‑related claims, especially in densely built regions. The report also highlights a persistent protection gap: only 49 % of the $220 billion economic loss was insured, leaving emerging economies with coverage rates as low as 10‑20 %. As exposure grows and rebuilding costs rise, capital markets will face pressure to provide additional capacity through catastrophe bonds and alternative risk‑transfer solutions.

Looking ahead, Swiss Re warns that the structural upward trend—driven by a 5‑7 % annual increase in insured losses—could produce a peak‑loss year exceeding $300 billion if exposure and hazard intensity converge. Such a scenario would test the resilience of the global insurance system and amplify calls for proactive adaptation measures, stricter building codes, and expanded public‑private partnerships. Policymakers, insurers and asset managers must therefore prioritize risk mitigation and broaden affordable coverage to narrow the protection gap and sustain market stability.