Total insurance claims for global natural disasters were the second highest on record among the first half periods, highlighting the importance of having access to effective modelling solutions, Aon’s 2025 Catastrophe Risk Management Survey says.

Among its findings, the Survey revealed that 48% of insurers do not license catastrophe models, and only 27% have dedicated model evaluation teams, potentially limiting their insights and ultimately their ability to shape better business decisions.

The Survey also identified the following three key themes:

Analytics as a strategic imperative – More than 80% of survey participants indicated that analytics are integral to their risk management and reinsurance placement strategies, while nearly 60% operate with catastrophe risk teams of five or fewer people and rely heavily on the analytical expertise of their reinsurance brokers. This partnership was said to enable more effective model evaluation, portfolio management and rapid catastrophe response.

Confidence in science-backed catastrophe models – More than 70% of respondents cited the importance of models built on robust scientific and engineering principles for underwriting, capital management and reinsurance. Meanwhile, 44% ranked the reasonableness of model methodology as the most important criteria when choosing a model to license.

Regionalization of catastrophe risk strategies – Risk management approaches are regionally tailored, with significant variation in preferred models, climate change considerations and model adoption rates. Catastrophe model vendor preference also varies regionally.

The survey also highlighted the following top concerns among respondents:
 

• Data quality – 68% of respondents use methods to improve data quality, with a focus on property characteristics and location accuracy.
• Model transparency – Concerns were expressed about the potential misalignment of modeled losses with actual claims experience.
• Accumulation management – Respondents most often rely on their reinsurance broker for tools to manage accumulation risk.
• Non-modeled loss – Non-modeled loss was cited as a top concern among respondents, and yet only 20% make adjustment to their view of risk to account for it.
• Climate risk – 68% were seeking improved methods to integrate climate change impacts.

“In an increasingly complex and volatile global risk environment, our survey highlights the importance of re/insurers implementing a multi-model, risk-level catastrophe management strategy that incorporates the latest climate science. It also reveals that risk management strategies vary regionally and must be considered when identifying appropriate risk transfer mechanisms to optimize utilization of capital. Taking such steps can lead to better business decisions, and a generally more robust global re/insurance industry”, commented Katie Carter, head of View of Risk Advisory for Aon in the Americas.

The full report can be found here.