Swiss Re Institute estimates that hurricanes and earthquakes could drive global insured losses to USD 300 billion or more in a peak year, Swiss Re said in its recent press release.

According to the Swiss Re Institute analysis, 2025 started with wildfires in Los Angeles, causing an estimated USD 40 billion in insured losses. While these losses from a secondary peril are substantial, primary perils remain the biggest threat: when a severe hurricane or strong earthquake hits a densely populated urban area, insured losses in that year could be more than double the long-term loss trend.

According to Swiss Re Institute estimates, some of the hurricanes from the early 20th century would cause losses well over USD 100 billion if they were to strike today. For example, Hurricane Andrew in today's prices caused USD 35 billion in insured losses in 1992. If a hurricane were to strike the same path today, it would cause losses nearly three times higher, due to economic growth, population increase and urban sprawl. Meanwhile, Hurricane Katrina, the costliest single insured loss event for the re/insurance industry ever, would not cause the same destruction as 20 years ago. Insured losses would still reach around USD 100 billion due to rising housing and construction costs, but improved flood defences and a 20% decrease in local population along Katrina's path have significantly reduced exposure.

"Our recent analysis of over 200 in-house models and the loss trend over the last 30 years show what is at stake: When a severe hurricane or a major earthquake hits an urban area in a country with significant insurance take-up, insured losses could easily reach USD 300 billion in that year", commented Balz Grollimund, Swiss Re's Head of Catastrophe Perils.

The report key takeaways are:

• Following the long-term annual growth trend of 5–7%, global insured natural catastrophe losses may reach USD 145 billion in 2025, mainly driven by secondary perils like severe thunderstorms, floods and wildfires
• Primary perils like hurricanes and earthquakes pose biggest risks, potentially driving insured losses to USD 300 billion or more in a peak year
• Reinsurers pivotal for peak years and well capitalised to absorb large shocks with estimated global capital of USD 500 billion.