US dominates ‘manageable’ $129bn claims burden in 2025 – Gallagher Re

Global insured losses from natural catastrophes reached an estimated $129bn in 2025, around 5% below the 2015–2024 decadal average, according to Gallagher Re’s Natural Catastrophe and Climate Report.

The paper said the private and public insurance markets absorbed $129bn of an estimated $296bn in global economic losses during the year.

The estimated direct economic cost of natural hazards was $296bn, according to the broker’s report.

“The private insurance market and publicly funded insurance entities covered an estimated $129bn of that total,” said the report.

The headline figures point to a manageable loss year for the global re/insurance industry, the broker concluded.

The report said 2025 was “generally manageable from a financial loss perspective”, but warned this masks growing complexity of catastrophe risk.

“The complexity of these events is accelerating the need to better understand how both physical and non-physical risk profiles are evolving and becoming increasingly interconnected,” the report said.

The US dominated global insured losses during the year, according to the broker.

Most insured loss events took place in the US, adding up to around $100bn or 78% of the global sum.

It added that the rest of global insurance markets “broadly endured a manageable loss impact”.

The single costliest loss sequence for insurers was the January 2025 Los Angeles, California wildfires (pictured), with an insured loss pegged at $41bn.

Severe convective storms were the dominant loss driver across the year.

“Severe convective storms (SCS) drove at least 47% of insured losses ($60bn),” Gallagher Re said.

It added: “Of which $51bn occurred in the US.”

The report said SCS has now become the industry’s most persistent annual loss driver.

SCS events in 2023, 2024, and 2025 have now cost global insurers a combined $208bn in today’s dollars, of which $176bn (85%) has occurred in the US.

The report said there were at least 23 individual billion-dollar insured loss events globally during the year.

It said this was “notably lower than recent years in 2024 (32) and 2023 (37), though near the 10-year average (25)”.

All but two of those events were weather or climate related, the broker suggested.

“The US accounted for 16 of the 23 billion-dollar insured events, including 13 that were tied to SCS outbreaks,” the report said.

Gallagher Re stressed that 2025 was also notable for its climatic context.

The report said: “NOAA and other global climate agencies confirm 2025 as a Top 3 warmest year on record dating back to 1851.”

It added that 2025 was “the first year since 2015 without a landfalling hurricane on the US mainland”.

Despite the absence of US hurricane landfalls, Gallagher Re said loss volatility remains elevated.

The report said: “We continue to endure the growing influence of climate change on global weather patterns and individual events.”

The broker cautioned against interpreting reduced losses as a durable trend for the future.

“Climate change will not translate to consistent linear growth in event frequency or intensity in all parts of the world for all perils,” the report said.

“The rational approach is to understand that greater annual and regional volatility in individual event behavior will bring greater losses and more downstream societal impacts,” it added.

Gallagher Re said that several countries experienced severe strain despite lower global loss totals.

“There were several countries around the world including Jamaica, Myanmar, Indonesia, Sri Lanka, and Pakistan which did experience considerable financial strain in the aftermath of major disasters. Significant portions of economic losses were uninsured.”

The protection gap remained a structural concern; the portion of costs not covered by insurance stood at 56%, or $167bn.

Gallagher Re said the industry enters 2026 from a position of financial strength.

“Following consecutive manageable catastrophe loss years, there is a record amount of capital available for market deployment – $838bn,” the paper said.

The reinsurance broking firm warned against complacency in its accompanying press release.

Chief science officer Steve Bowen said: “This is not a time to be complacent.”

“The complexity of natural catastrophe events is accelerating the need to better understand how both physical and non-physical risk profiles are evolving and becoming increasingly interconnected,” he added.

Gallagher Re said advances in forecasting and analytics will be critical.

A key development in advancing weather and climate forecasting is the growing integration of Artificial Intelligence (AI), the report emphasised.

It added: “AI-trained models have enhanced the insurance industry’s ability to utilize even more data to improve its analytics capabilities and help clients make more informed decisions.”

However, Gallagher Re cautioned that AI will not replace traditional modelling frameworks.

The report said: “Trained scientists and other qualified users will continue to rely on a blend of next generation AI forecasting models and more traditional numerical weather prediction models.”

Bowen said the industry must adapt to rising volatility rather than rely on historical averages.

“Our industry must accept, develop, and utilize new analytics and technologies to better forecast and communicate risk,” he added.