Rising Insured Losses: The Financial Toll of Natural Disasters

Natural disasters may cause $145 billion in insured losses in 2025, according to Swiss Re. Major contributors include wildfires in Los Angeles, with estimated losses of $40 billion. The underlying risks increase with economic and population growth, urban sprawl, and climate change, significantly impacting insured loss figures.

Swiss Re has projected that natural disasters could result in $145 billion in insured losses for 2025, marking a nearly 6% rise from the previous year. This projection makes it one of the costliest years on record for such losses.

The report notably cites the wildfires in Los Angeles as a significant factor, with these events alone accounting for an estimated $40 billion in losses. Factors contributing to this increase include economic and population growth, urban sprawl, and the effects of climate change.

The report also noted that the total losses, inclusive of those not covered by insurance, reached $318 billion in 2024, illustrating an upward trend from prior years and underscoring the increasing financial impact of natural catastrophes globally.

(With inputs from agencies.)