In 2025, the estimated direct economic costs from global natural perils were USD296 billion. The private insurance market and public insurance entities covered an estimated USD129 billion of that total. The 5-year annual average loss for insurers from natural catastrophes has grown to USD155 billion as changes in hazard, societal, and economic behavior combine to drive more expensive disasters.
With each passing year, we continue to witness more extremes and unusual occurrences of natural catastrophes around the world. This rise is seen in areas long considered to be 'lower risk', in addition to parts of the globe already known to be more vulnerable. While the (re)insurance industry remains able to absorb these growing losses, we are confronted with a new reality. 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. Our industry must accept, develop, and utilize new analytics and technologies (such as AI) to better forecast and communicate risk.
With insights from Gallagher Re experts, the broader Gallagher family, and our academic partners including Colorado State University via the Gallagher Research Centre, this report provides a comprehensive analysis of natural catastrophe and climate risk trends, offering guidance to clients and stakeholders across the private and public sectors.
Readers of this report can:
- Examine global and regional catastrophe peril and loss drivers
- Identify emerging hazard/loss patterns and how to integrate such data to strategies against future risks
- Better understand how to link physical and non-physical risks from climate change into (re)insurance decision making
- Appraise the role of AI in weather/climate forecasting
