Natural catastrophes such as floods, earthquakes and storms cause significant human and financial losses, with insurance playing a key role in recovery. Our Natural Catastrophe Insurance Resilience Index is a measure of insurance coverage that estimates the degree to which available private insurance protection covers the protection needed, based on modelled expected losses. The protection gap is measured in premium-equivalent terms: it represents the difference between insurance premiums currently written and those required to fully cover expected economic losses. We model expected losses for all primary and most secondary perils, excluding wildfire due to data limitations. These figures are based on modelled expected losses derived from estimates of exposure, hazard and insurance coverage. As a result, they differ from the actual insured and economic losses reported in Swiss Re Institute's annual natural catastrophe sigma publications, (for example, sigma 1/2026), which reflect losses from historical catastrophe events. ¹

We estimate the global natural catastrophe protection gap at USD 424 billion in 2025, a rise from USD 395 billion a year earlier. Yet the proportion of protection need covered by insurance was broadly unchanged vs 2024 (resilience index at 27.3%). The resilience index improved two percentage points over the past decade, from 25.3% in 2015. Protection needed and protection available have both risen, with the latter doing so at a slightly faster pace due to rising insurance penetration. Yet, in absolute terms, the protection gap continues to grow, as there is simply more to protect.

Economic growth has been the dominant driver of rising exposure, and the global protection gap has grown broadly in line with nominal GDP. ² The regions of advanced Asia Pacific (APAC) and advanced Europe, Middle East and Africa (EMEA) –which we define as the advanced economies in these geographic regions – show encouraging resilience gains. However, many emerging markets continue to accumulate exposure with very limited insurance protection, leading to still-low insurance resilience scores as of 2025.

The advanced EMEA and advanced Asia Pacific regions recorded encouraging resilience gains over the decade. We estimate that the insurance coverage ratio, measured by SRI's natural catastrophe insurance resilience index, improved to 41.3% in 2025 from 37.1% in 2015 for advanced EMEA, and to 29.1% from 22.5% for advanced Asia Pacific. For example, in Germany, insurance take-up rates for fire and storm have reached about 99% of residential buildings, and flood insurance now covers 57% of households up from roughly 20% two decades ago.³

SRI's insurance coverage ratio (resilience index) for North America has stayed relatively constant, fluctuating between 40-42% since 2015, indicating that the widening in the protection gap is driven by large absolute exposure growth. Even with relatively strong insurance coverage, the sheer scale of new economic exposure means the uninsured portion is persistently growing in absolute terms.

The drivers of exposure growth are structural, as population continues to concentrate in catastrophe-exposed states. Adding to the exposure challenge, US property reconstruction costs surged over the past decade.⁴ While at the regional level the share covered by insurance is stable, the opposite is true in some highly hazardous areas. For example, in California, only 12% of residential property insurance policies included earthquake coverage in 2024, down from 30% at the time of the Northridge Earthquake in 1994.⁵

The emerging markets aggregate resilience has marginally declined over the decade, meaning they are accumulating risk with a smaller insurance safety net. Latin America and emerging EMEA saw their gaps increase over the decade while resilience remained at around 8-9% with almost all catastrophe exposure unprotected. In Emerging Asia, exposure growth has been even more rapid, driven by urbanisation and rapid economic development, but with resilience of just 5%, nearly all the new exposure is uninsured.

If the long-term 5-7% annual real-term growth trend in insured losses persists, insured losses could reach USD 186 billion by 2030 globally, according to Swiss Re Institute (from USD 107 billion in 2025).⁶ To improve resilience and reduce the natural catastrophe protection gap, insurance coverage must be increased to transfer risk, and expected economic losses must be reduced. Targeted adaptation can reduce expected losses and help to improve the conditions for insurance availability and insurability. It can lower physical vulnerability and help to reduce the risk that catastrophic risks become uninsurable over time. For example, in western/central Europe, sigma analysis suggests that flood protection and adaptation measures, such as dikes, levees and land-use planning, have contributed to constraining insured loss growth, particularly for countries such as the UK, France, Switzerland, and Austria.⁷ For Europe, after accounting for the increasing insurance take-up in many countries, no residual flood-insured loss growth is observed (see Figure 1).

Evidence from Hurricane Sally in 2020 shows how targeted physical adaptation at the homeowners' level can materially reduce disaster losses. In Alabama, a coordinated strategy combining the Insurance Institute for Business & Home Safety (IBHS) Fortified building standard with premium discounts, public retrofit grants, and independent third-party verification led to materially lower insured losses. Homes built or retrofitted to the Fortified standard experienced a 55-70% reduction in claim frequency and 14-40% reduction in severity, contributing to loss ratios 51-72% lower than conventional construction.⁸ There are also concrete examples where well-defined adaptation measures translate directly into insurance benefits. In Louisiana, homes retrofitted to the Fortified building code standard receive a 7-24% discount on annual homeowners insurance premiums, demonstrating that risk-based pricing can reward resilience measures.⁹

Swiss Re Institute's review of recently completed US adaptation interventions found they are projected to be economically attractive across hazard types and project scales. We assessed publicly documented adaptation projects approved between 2010 and 2022 that disclosed an expected benefit-cost ratio (BCR), a metric that helps to evaluate a project's anticipated economic benefits relative to the investment. Table 2 summarises some of these projects, representing roughly USD 9 billion in combined nominal project value.¹⁰ All projects reviewed with a disclosed BCR yield positive net benefits, with a median of 1.86 and a range from 1.2 (Cedar Rapids urban flood defences) to 9.63 (Middle Rio Grande levees).

Flood risk management interventions span the widest expected BCR range, reflecting the strong influence of local exposure concentration: the Middle Rio Grande project protects multiple communities downstream of Albuquerque²², whereas the Cedar Rapids levee system has an expected BCR of 1.2 because its scope is limited to one bank of the river ²³.  In Sacramento and Fargo–Moorhead, the recommended plans expect lower BCRs than the economically optimal alternative because local sponsors prioritised broader objectives, including protecting downstream communities²⁴.

Coastal storm risk management projects cluster more narrowly between 1.47 and 3.20, with cost intensity that is an order of magnitude higher than inland flood projects. The projected BCRs may not capture all potential benefits of adaptation investments, as many project appraisals exclude factors such as life-safety benefits, broader economic effects and ecosystem services. 

The rising value of natural catastrophe-exposed assets, and so the absolute protection gap, continues to pose resilience risks, despite our finding that insurance cover has broadly kept pace with fast-growing exposures. One way to improve resilience across regions is to reduce expected losses through targeted adaptation projects, which can lower physical vulnerability, support insurability and improve the economics of risk transfer.

The right mix of adaptation measures, clearer appraisal standards, and market incentives that reward risk reduction, may support further improvement in the global insurance coverage (resilience index) ratios even as exposure rises. An integrated approach that combines insurance coverage with risk-adaptation measures in exposed areas, can narrow natural catastrophe protection gaps.