Global Insured Disaster Losses: First Half 2025 Analysis

Global insured losses from natural disasters in the first half of 2025 (H1 2025) reached at least USD 100 billion, marking the second-highest H1 total on record, surpassed only by H1 2011’s USD 140 billion. This figure significantly exceeds the 21st-century H1 average of USD 41 billion and median of USD 37 billion, as well as the H1 totals for 2023 and 2024, each at USD 71 billion. Over 90% of these losses were driven by U.S.-based events, primarily wildfires and severe convective storms (SCS).

The global insurance protection gap was a record-low 38% for H1, compared to the 21st-century average of 69%, reflecting high insurance penetration in the U.S. Fatalities totaled 7,700, well below the 21st-century average of 37,250, with 5,456 attributed to a Myanmar earthquake. With second-half losses historically averaging USD 78 billion, 2025 could rank among the costliest years for insured losses depending on future catastrophe activity.

Global Insured Disaster Losses: First Half 2025 Analysis

Market Overview

The H1 2025 insured loss total of USD 100 billion underscores the increasing financial impact of natural disasters, driven by climate-related events and socioeconomic factors such as urban growth and asset exposure.

The data, sourced from Aon’s Global Catastrophe Recap: First Half 2025, highlights the concentration of losses in developed markets with robust insurance ecosystems, contrasted by significant underinsurance in developing regions. The report also notes a significant reduction in the global insurance protection gap, reflecting improved coverage in high-loss regions like the U.S.

Key Drivers

• U.S. Wildfires and Severe Convective Storms: Over 90% of insured losses (approximately USD 92 billion) stemmed from U.S. events, with California’s Palisades and Eaton wildfires alone contributing USD 40 billion. Multiple SCS outbreaks across the U.S. further amplified losses, with 18 of 19 billion-dollar insured loss events occurring in the U.S.

• Climate Change: Increasing frequency and severity of weather-related events, such as wildfires and SCS, are linked to warmer global temperatures and shifting climate patterns.

• Insurance Penetration: High coverage levels in the U.S. resulted in a lower protection gap, while regions like Myanmar faced significant uninsured losses due to limited insurance adoption.

• Economic Exposure: Urbanization and rising property values in disaster-prone areas continue to elevate economic and insured loss totals.

Regional and Event Analysis of Insured Disaster Losses

The distribution of insured losses in H1 2025 was heavily skewed toward the U.S., with other regions contributing minimally to the global insured total. Economic losses, however, were more evenly distributed, highlighting disparities in insurance coverage.

Region/Event	Insured Losses (USD Billion)	Economic Losses (USD Billion)	Key Events
United States	92	126	Palisades and Eaton wildfires (USD 40B insured), SCS outbreaks
Myanmar	<0.1	12	Magnitude-7.7 earthquake (March 2025), 5,456 fatalities
Europe	~1	Not specified	SCS outbreak (June 2025)
Australia	0.9	Not specified	Cyclone Alfred (March 2025)
Global Total	100	162	19 events exceeding USD 1B in insured losses, 18 in the U.S.

Key Insights

• United States: The USD 92 billion in insured losses was driven by the destructive California wildfires in January, which damaged or destroyed over 18,000 structures, and multiple SCS events, including a March outbreak causing USD 6 billion in economic losses. The U.S. accounted for USD 126 billion of the global economic loss total of USD 162 billion, the highest H1 figure since 1994.

• Myanmar Earthquake: The March 2025 magnitude-7.7 earthquake near Mandalay resulted in USD 12 billion in economic losses but less than USD 100 million in insured losses, reflecting a significant protection gap in developing regions.

• Europe and Australia: A late-June SCS outbreak in Europe and Cyclone Alfred in Australia (USD 900 million insured losses) were the only non-U.S. events exceeding USD 1 billion in insured losses.

• Protection Gap: The global protection gap of 38% is the lowest H1 figure on record, driven by high U.S. insurance penetration. In contrast, Myanmar’s protection gap was near 99%, with only 0.8% of economic losses insured.

Fatalities

Natural disaster fatalities in H1 2025 totaled 7,700, significantly below the 21st-century H1 average of 37,250. The Myanmar earthquake accounted for 5,456 deaths (71% of the total), with other events contributing approximately 700 fatalities. Improved forecasting and disaster preparedness, such as the National Weather Service’s rare “high” risk warning for the March 14-16 U.S. SCS outbreak, helped mitigate loss of life.

Insurance Protection Gap

The global insurance protection gap for H1 2025 was 38%, the lowest on record for a first half, compared to the 21st-century average of 69%. This reflects the concentration of losses in the U.S., where insurance penetration is high. In contrast, developing regions like Myanmar face near-total uninsured losses, highlighting the need for expanded insurance solutions in vulnerable areas.

Metric	H1 2025	21st-Century H1 Average
Insured Losses (USD Billion)	100	41
Economic Losses (USD Billion)	162	141
Protection Gap (%)	38	69
Fatalities	7,700	37,250

Future Outlook

Historical data indicates that second-half insured losses average USD 78 billion over the past decade, with a peak of USD 164 billion in 2017. Given H1 2025’s USD 100 billion, the full-year total could rank among the top 11 costliest years, potentially exceeding USD 178 billion if second-half losses align with historical averages. The above-average tropical cyclone activity anticipated for the 2025 North Atlantic hurricane season, ending in November, could further elevate losses, particularly if La Niña conditions materialize.

Challenges

• Underinsurance in Developing Regions: The Myanmar earthquake exemplifies the persistent protection gap in emerging markets, where insured losses covered less than 1% of economic damages.

• Climate-Driven Losses: Increasingly severe wildfires and SCS, fueled by climate change, challenge insurers’ pricing and coverage models.

• Loss Volatility: The concentration of losses in high-penetration markets like the U.S. masks global disparities, requiring innovative solutions to expand coverage.

Conclusion

The USD 100 billion in insured losses for H1 2025, driven predominantly by U.S. wildfires and SCS, marks a significant escalation from recent years and underscores the growing impact of climate-related disasters. The record-low 38% protection gap reflects strong U.S. insurance coverage, but stark underinsurance in regions like Myanmar highlights global inequities. With potential for further losses in H2 2025, insurers must leverage advanced analytics and mitigation strategies to address rising risks. Everbright Actuarial Consulting Services stands ready to support stakeholders in building resilience and closing the protection gap.

Everbright Actuarial Consulting Services

Navigating the complexities of rising insured disaster losses requires data-driven strategies and expert insights. Everbright Actuarial Consulting Services offers comprehensive risk assessment, catastrophe modeling, and tailored insurance solutions to help insurers and stakeholders manage volatility and close the protection gap. Contact us at

info@ebactuary.com to enhance resilience and optimize your risk management approach in this evolving landscape.