Earthquakes, floods and tropical cyclones were the main drivers of the USD 5 billion in insured losses from natural catastrophes in Asia in 2025. 92% of the loss burden was uninsured, pointing to large protection gaps, especially in lower-income markets constrained by affordability, access and weaker insurance frameworks. Rising losses are being driven mainly by exposure growth, including rapid urbanisation, infrastructure expansion, and the concentration of assets in flood-prone and coastal areas. Adaptation is improving through better protection, building standards and warning systems, but progress is not yet sufficient or universal, underscoring the need for stronger resilience and broader insurance coverage.

Insured losses from natural catastrophes in Asia totaled USD 5.2 billion in 2025, well below the prior 10-year average of USD 11.5 billion and the lowest since 2017. Earthquakes, floods and tropical cyclones were the main drivers, causing insured losses of USD 1.9 billion, USD 1.7 billion, and USD 1.2 billion, respectively. This breakdown is in line with the region’s historical loss experience: since 1970, these three perils have accounted for more than 90% of Asia’s annual insured losses on average.

Share of insured losses from natural catastrophes in Asia by peril, 2025 and previous-year averages

Despite accounting for only about 5% of global insured losses, at USD 65 billion, Asia contributed 30% of global economic losses from natural catastrophes in 2025, roughly in line with the long-term average of 36%. The economic losses were just below the previous 10-year average of USD 67 billion, and were driven primarily by the earthquake in Myanmar, floods across southeast Asia and China, and tropical cyclone (TC) Ditwah in Sri Lanka. Asia’s large share of global economic losses but much smaller share of insured losses flags a still-sizeable protection gap. Only 8% of the region's economic losses were covered by insurance in 2025, well below the previous 10-year average of 17%. This outcome reflects the concentration of last year's catastrophe activity in the region's emerging markets. Some of the largest loss-making events struck lower-income countries with low insurance penetration and weak risk preparedness. Historically, the protection gap has been notably wider in emerging than advanced Asia (5% vs 22%)

Earthquake-related economic losses in Asia exceeded USD 18 billion in 2025. The biggest event of the year, both in economic and insured terms, was a magnitude 7.7 earthquake that struck Myanmar in March. It claimed approximately 3 900 lives,¹ and resulted in estimated economic losses of USD 11 billion in Myanmar alone. The quake struck densely populated regions of the country including Mandalay, the country's second-largest city. But with very limited coverage, insurance claims were limited to just above USD 200 million.

The shock was felt across a wide area including India, China and Thailand and associated loss outcomes demonstrate how site conditions and exposure, not just proximity to the epicenter, drive outcomes. For instance, Bangkok sits on a basin of soft sediment that acts like an amplifier, increasing the intensity and duration of shaking and making even distant earthquakes feel intense. The Thai General Insurance Association estimated the seismic ripple effects of the quake in Myanmar generated insured losses of USD 1.5 billion in the Thai capital.

This dynamic is not unique to Bangkok. Many major cities around the world including Mexico City, Los Angeles, Beijing and Tokyo are built on sedimentary basins and face elevated seismic risk due to potential for amplified ground motions. Modern seismic hazard assessment needs to capture basin effects, distant-source shaking and detailed local soil conditions to assess levels of resilience and determine required stringency of building codes. But, while building codes can reduce damage, their effectiveness depends on rigorous enforcement and that is not always the case.

Economic losses from floods in Asia in 2025 were USD 31 billion, accounting for more than half of the region's total. The largest loss-making event was a flood across Thailand, Indonesia and Malaysia from late November to early December, driven by a combination of monsoon-related and TC rainfalls. Back-to-back storms arrived 5‒15 days apart as atmospheric and oceanic conditions in the Northwest Pacific (NWP) basin boosted TC activity. The compounding effects of the storms resulted in estimated economic losses of at least USD 11 billion. The storms acted both sequentially and simultaneously: they saturated the soil and overwhelmed flood defenses, triggering widespread flooding, landslides and storm surges that left more than 1 300 people dead. TC Ditwah alone, one of the contributing systems, resulted in estimated economic losses of more than USD 4 billion in Sri Lanka, making it the country’s costliest natural catastrophe on record.

Late monsoon season storms are not unprecedented in the NWP basin (there were four in 2024 and two in 2025), and exposure and structural vulnerabilities can amplify the damage caused. Rapid urbanisation alongside inadequate drainage and embankments, and slope instability in affected areas, turned last year's heavy rains into floods and landslides. These pressures are intensifying as the build-up and implementation of adaptation measures has not kept pace with the evolution of exposure growth. For example, in Thailand built-up surface area grew by 43% between 2003 and 2023, of which more than half (55%) is in areas exposed to inland flooding.² This pattern increases the value at risk and raises the likelihood that future compound events will yield outsized losses.

Flood is a major driver of natural catastrophe losses in Asia. The risk is high due to the combination of heavily urbanised areas along major river systems and the presence of persistent monsoon rains. Flood-related insured losses in the region are rising about twice as fast as in the rest of the world (around 12% vs 6%). Historically floods have accounted for 33% of the annual economic losses from natural peril events in Asia since 1970, but the share of insured losses is much lower at 20%. This points to the limited insurance penetration across many exposed areas in the region and a substantial protection gap.

Our analysis suggests that economic growth has been the main driver of the observed increase in flood-related insured losses.³ However, a residual trend indicates that implementation of mitigation and adaptation measures has not fully kept pace with developments in other risk drivers, including hazard shifts, land-use change such as soil sealing, and rapid urbanisation. In China, for example, built-up areas within flood zones increased by 480% between 1975 and 2025. During the same time, there was a 76% increase in exposed population. While part of this divergence reflects rising wealth and infrastructure expansion, the growing concentration of assets in flood-prone areas raises flood risk, with more impervious surfaces leading to greater soil sealing, reduced infiltration and increased runoff. These factors can amplify insured losses beyond what population and exposure growth alone would suggest.

Insured loss growth from floods in Asia since 1970, decomposed into key exposure drivers, insurance effects and residuals

Many Asian economies are expanding rapidly, often faster than efforts to reduce vulnerability to severe weather and other natural hazards. Flood protection and building standards have improved in many countries, and adaptation is advancing through stronger early warning systems and more integrated resilience measures. However, progress remains uneven across the region because hazard profiles, economic development, insurance coverage, adaptation funding, and implementation quality differ widely.

China is one example of this divergence. Inland, rapid urbanisation has outpaced drainage and flood-defence capacity, leaving many cities more vulnerable to pluvial and river flooding, contributing to a widening protection gap. Along the coast, catastrophe risk is rising for different reasons: continuous population growth, industrial upgrading, infrastructure investment, and the expansion of ports and logistics hubs are concentrating more high-value assets in areas exposed to typhoons, storm surge and coastal flooding.⁴ As a result, China’s catastrophe risk is building up and becoming more geographically and structurally complex. Insurance coverage is not keeping pace, pointing to a widening protection gap. Over time, these shifts in asset concentration and resilience may increase loss volatility and risk accumulation.

For insurers, this underscores the need to update underwriting models to reflect evolving exposure patterns and to strengthen risk mitigation through closer cross-stakeholder collaboration. At the same time, under-insurance in Asia reflects three main constraints: affordability, access and institutional capacity. Advanced Asian markets tend to benefit from higher incomes, stronger institutions and in some cases public-private or attached schemes. In much of emerging Asia, on the other hand, lower incomes, limited market reach, weak risk-awareness and less mature insurance frameworks continue to constrain insurance penetration, particularly for flood.