Verisk reported that the global modelled insured average annual property loss (AAL) from natural catastrophes has reached US$152 billion.
The figure, released in the company’s latest Global Modelled Catastrophe Losses Report, signals that the insurance industry should prepare for annual insured property losses from natural disasters that may exceed this amount.
The 2025 report draws on catastrophe models used by insurers and reinsurers worldwide. The models account for factors such as inflation, urban growth, increased event frequency, and climate change. According to Verisk, the non-crop global modelled insured AAL rose by US$32 billion over 2024, reflecting a continued rise in catastrophe losses globally.
Over the last five years, insured losses have averaged US$132 billion annually, compared to US$104 billion in the previous five-year span.
Rob Newbold, president of Verisk Extreme Event Solutions, said the current loss figures indicate a shift in the risk landscape.
“Frequency perils are driving sustained, high-impact losses across geographies, and insurers must evolve their strategies to meet this challenge head-on,” Newbold said. He added that natural catastrophe losses have become “the new normal,” and that Verisk’s models are designed to help the industry anticipate and absorb these shocks.
The report highlights that property exposure in Verisk-modelled countries grew at an annual rate of 7% from 2020 to 2024, influenced by inflation and construction in high-risk areas. About 1% of the year-on-year AAL increase is attributed to long-term climate effects.
The protection gap remains significant, with insured losses covering only 12% of economic losses in Asia and 32% in Latin America, compared to 48% in North America.
In North America, insurance penetration is high, but wildfire risk continues to rise. The 2025 Palisades and Eaton fires resulted in up to US$65 billion in economic losses, with 60–70% insured.
Verisk estimated that insured property losses from these Southern California wildfires ranged between US$28 billion and US$35 billion, with the majority involving residential properties. The Palisades fire alone is expected to account for US$20 billion to US$25 billion in insured losses.
Many of the affected areas include high-value properties, and the company noted that demand surge and debris removal costs are expected to be significant. The estimate also includes losses to commercial and industrial properties, as well as automobiles, and accounts for insured take-up rates and demand surge, but excludes certain items such as smoke damage losses and litigation-related costs.
Asia and Latin America continue to face significant protection gaps, with low insurance take-up persisting despite growing exposure and urbanisation. Europe and Oceania have seen exposure growth rates above 8% annually in some regions, driven by inflation and urban expansion.
Verisk has introduced new inland flood models for Malaysia, Indonesia, and Ireland, and updated models for Australia (bushfire), Mexico (earthquake), the UK (flood), the US (severe thunderstorm), and South Korea (typhoon).
Dr. Jay Guin, Verisk’s chief research officer, previously noted that while climate change currently accounts for about 1% of the annual increase in catastrophe losses, its influence is expected to become more significant in the coming decades.
This trend underscores the importance for insurers and reinsurers to adopt advanced, forward-looking models to better estimate risk and guide decision-making as climate-related risks continue to evolve.
“The report emphasises the need for insurers and reinsurers to adopt forward-looking risk models that reflect today’s built environment and climate realities. Verisk’s catastrophe models, used with Touchstone and Touchstone Re, help companies benchmark potential losses and manage catastrophe risk with confidence,” Newbold said.
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