No let-up for insurers as nat cat losses head for another $100bn year, Willis warns

Insurers should not expect any respite from natural catastrophe losses in 2025, according to new analysis from Willis, which forecasts a seventh consecutive year of insured losses above $100bn.

The broking firm’s latest “Natural Catastrophe Review” highlights a string of major events already recorded in 2025 – including the most costly wildfire in insurance history – as evidence that extreme weather is becoming the norm for the global insurance and reinsurance industry.

“The wildfires in Los Angeles early in 2025 will drive estimated losses of $40bn alone, so the streak looks set to continue,” said Peter Carter, head of climate practice at Willis.

“2024 continued a six-year streak of natural catastrophe losses in excess of $100bn.

“With global efforts likely failing to keep the temperature below 2°C above pre-industrial levels, our focus must now turn to adapting and building resilience in the face of this new reality,” Carter said.

According to Willis, there hasn’t been a single year with low nat cat losses since 2018.

Its biannual review outlines not only the events but also their underlying causes, and offers a forward-looking view of potential risks through the rest of 2025 and into 2026.

So far in 2025, the insurance industry has faced:

• The worst wildfires on record in Los Angeles

• Historic wildfires in Japan and South Korea

• The third-most active tornado year ever recorded in the US

• The first landfalling cyclone near Brisbane in 50 years

• Record-breaking wind speeds over Ireland

Cameron Rye, director of natural catastrophe analytics at Willis, said the concentration of early-year losses has already put insurers under pressure.

“The Los Angeles wildfires of January 2025 resulted in insured losses more than $40bn, equivalent to nearly one-third of global insured losses the previous year,” said Rye.

“The scale and timing of the event placed immediate pressure on insurers’ catastrophe loss budgets at the beginning of the year and prompted a renewed focus on how wildfire risk is modelled, particularly in high-exposure areas like the urban-wildland interface,” he added.

With an above-average North Atlantic hurricane season forecast, the review suggests that 2025 could become one of the most expensive years on record for the re/insurance industry.

The report also urges insurers and risk managers to make better use of evolving climate science, seasonal forecasts and catastrophe analytics to mitigate future exposure. It provides region-by-region insights into where threats may intensify over the coming six months.

“The severity and scale of recent catastrophes underline the need to confront a new era of climate extremes,” the report said.

“Data-driven strategies are needed to narrow protection gaps and stay resilient in a rapidly changing world,” Willis added.