A new report from Willis, a WTW business, with contributions from Willis Re, has revealed that natural catastrophes generated more than $100 billion in insured losses in 2025, marking the sixth consecutive year above that threshold and underscoring the continued severity and persistence of natural catastrophe risk even in the absence of a single hurricane making U.S. landfall.
The findings form part of the firm’s Natural Catastrophe Review, in which Cameron Rye, Director of Natural Catastrophe Analytics at Willis Re, noted that while insured losses in 2025 declined by around $40 billion compared with 2024, good luck is no substitute for sound strategy.
Rye continued, “Even if 2025 can be described as a moderate loss year, catastrophe risk remains high, and physical risks continue to increase as the world warms.
“Insurers should act now to protect their portfolios against unsustainable accumulations of risk and prepare for a reversal of fortune. The path forward given these trends isn’t to walk away from risk, but instead to encourage investment in resilience and mitigation.
“Risk managers and sustainability teams can protect business value by working together, supported by advances in modelling, pricing and risk awareness.”
Key takeaways from Willis’ report include the need to treat wildfire as a core driver of insurance portfolio volatility; to incorporate compound perils into risk modelling; to recognise that a warming North Atlantic is altering hurricane behaviour; and to acknowledge that flood risk is no longer confined to formally defined zones, with tropical storms expected to bring more intense rainfall than ever before.
Willis observed that before 2025, there had been eight wildfires in California with insured losses greater than $2.8 billion, with 2018’s Camp Fire being the most destructive ($12.5 billion).
“In January, we were confronted by the stark reality that wildfires can be much more severe. Together, the Eaton and Palisades Fires burned almost 60 square miles across Los Angeles County and destroyed more than 18,000 structures,” Willis added.
Insurers have reportedly paid more than $22.4 billion to cover home, business, living expenses, auto damage, and other disaster-related claims related to the Eaton and Palisades Fires.
Once all claims are paid, Willis said that total insured losses for the Los Angeles wildfires may approach $40 billion.
On the hurricane front, Willis stated that the insurance industry should not allow the year-on-year decrease in insured losses to lull it into a false sense of security.
“We know physical risks continue to increase as the world warms. And sooner or later, all lucky streaks end. Insurers should act now to protect their portfolios against unsustainable accumulations of risk and prepare for a reversal of fortune,” the firm’s report explained.
Scott St. George, Head of Weather and Climate research at the Willis Research Network, said, “Even without any hurricanes making landfall in the United States, in 2025 insured losses from natural catastrophes were still over $100 billion worldwide.
“That tells us the risk floor for catastrophic perils is higher than ever. Beyond the immediate headlines, our team of experts digs into the structural pressures, overlooked warning signs, and systemic vulnerabilities that multiplied the impact of natural catastrophes in 2025.
“Our perspectives on the evolving risk landscape provide advice to insurers seeking to update their view of these risks, including the burgeoning affordability crisis in many markets.”
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