In 2025, secondary perils drove 92% of the USD 107 billion in insured natural catastrophe losses, the highest share on record. This included the wildfires that destroyed Los Angeles neighborhoods, but also severe convective storms in North America and flooding across much of Asia.

In fact, secondary perils, so dominant in 2025, have been the fastest-growing segment of insured losses for more than half a century and are raising the loss baseline. 

While 2025's losses came in below the USD 140 billion implied by the long-term growth trend – largely because no hurricane made landfall in the United States – one quieter year does not alter the direction of travel of risk. Over the long term, Swiss Re Institute (SRI) data shows that the trend of global insured natural catastrophe losses rising on average by 5-7% annually in real terms is intact.

Expanding exposure – more homes, businesses and infrastructure in harm’s way, a reflection of urbanisation and economic growth – accounts for most of this increase, SRI data show. Increasing insurance penetration is contributing to loss growth as more damage is covered, while rising prices also play a role in lifting post-catastrophe replacement costs.

For some perils in certain regions, however, insured loss growth is outpacing the expansion in exposure and the impact of increasing insurance coverage.

This residual loss growth beyond exposure reflects the combined effects of hazard intensification, which is linked to the frequency, intensity and spatial distribution of weather-related events, and heightened vulnerability, stemming from the susceptibility of exposed assets to damage as well as disproportionate development in high-risk areas without adequate mitigation. 

If recent experience is a guide, the dip in insured losses in 2025 is likely a fleeting phenomenon – a favourable catastrophe season, not a signal of lower risk. If the long-term loss trend resumes, it implies that insured losses could reach USD 148 billion this year. Should a peak-year scenario unfold, the 2026 insured loss could climb as high as USD 320 billion, SRI data show. 

The challenge that natural catastrophes pose to insurers is not the outcome in a single year, but an environment in which losses persistently rise. Understanding the factors driving these losses – and what can be done to strengthen insurability – requires a closer look.