Global insured losses from natural catastrophes reached $137 billion in 2024, according to the Swiss Re Institute's sigma report published on 29 April 2025. The largest contributors were hurricanes Helene and Milton in the United States, severe convective storms in the United States, large-scale urban floods around the world, and record natural catastrophe insured losses in Canada.
Economic losses from disasters in 2024 were $318 billion, according to the report, of which 57% were uninsured. That left a global protection gap, the difference between economic and insured losses, of $181 billion.
The trend
Swiss Re says insured losses from natural catastrophes continue to grow at 5% to 7% a year in real terms, the rate that has prevailed in recent years. If the trend holds, insured losses would approach $145 billion in 2025. The institute attributes the growth mainly to rising exposure, as more property is built in areas at risk, to higher replacement costs, and to the effects of a changing climate on some perils.
The report also estimates a 1-in-10 probability that global insured losses could reach $300 billion in 2025. A year at that level would be what Swiss Re calls a peak loss year, well above trend. The last peak loss year was 2017, when hurricanes Harvey, Irma and Maria drove global insured losses to 111% above trend. The report counts five peak loss years in the past 30.
Secondary perils dominate, primary perils carry the tail
In 2024, as in recent years, most global insured losses came from what the industry calls secondary perils, particularly severe convective storms that bring hail, tornadoes and damaging winds. These are high-frequency, moderate-severity events that cumulatively produce large losses. Primary perils, tropical cyclones and earthquakes, still hold most of the potential for extreme losses in a single year.
The 2025 year has already started with a large loss event. The Los Angeles wildfires in January destroyed thousands of homes and businesses in the Palisades and Eaton areas and are expected to produce one of the largest wildfire insurance losses on record, which places early 2025 losses well ahead of a typical first quarter.
Reinsurance capacity
Swiss Re estimates global traditional reinsurance capital at around $500 billion, with alternative capital, including about $50 billion from the catastrophe bond market, providing additional capacity. The report says the reinsurance market can absorb peak loss scenarios, including a $300 billion year. It adds that reinsurance capital must keep pace with rising exposures and earn its cost of capital over time to sustain this role.
When losses are close to trend, primary insurers pay most property claims. When losses surge well above trend, reinsurers typically cover more than half of the excess, according to the report.
Why energy companies are exposed
Energy infrastructure is among the most heavily insured asset classes, and it is directly exposed to the perils that drive catastrophe losses. Refineries, LNG terminals and petrochemical plants along the US Gulf Coast are exposed to hurricanes. Offshore oil and gas platforms in the Gulf of Mexico have suffered repeated storm damage. Power plants, substations and transmission lines face wind, flood, hail and wildfire risk, and solar farms have been damaged by hail in several US states.
Rising catastrophe losses feed through into insurance pricing and capacity. Property insurance rates for energy assets rose sharply after the large loss years of 2017 and 2021 and have remained elevated. Some insurers have reduced their exposure to specific risks, such as wildfire liability for utilities in the western United States, or have raised deductibles and tightened terms.
Utilities and wildfire liability
For electric utilities, the most acute insurance issue is wildfire liability. Under California's inverse condemnation doctrine, utilities can be held liable for property damage caused by their equipment regardless of negligence. After the 2017 and 2018 wildfires, PG&E filed for bankruptcy in 2019. California created a wildfire fund in 2019 to help pay claims against investor-owned utilities that meet safety requirements.
The January 2025 Eaton fire has renewed attention on this risk. Investigators are examining whether utility equipment played a role, and lawsuits have already been filed against Southern California Edison. Utilities across the western United States, including in Oregon, Texas and Hawaii, have faced large wildfire-related claims in recent years. Their ability to obtain liability insurance at reasonable cost has become a factor in credit ratings and in how regulators set rates.
Solar and wind assets
Renewable energy assets have their own exposure profile. Hail is a leading cause of damage to utility-scale solar projects in the United States, and insurers have increased premiums and deductibles for projects in hail-prone areas. Developers have responded with thicker glass, stowing panels at steep angles during storms and more detailed site risk assessments. Wind turbines face risks from lightning, extreme winds and, offshore, from storms and corrosion.
These risks feed into the cost of capital for renewable projects, because lenders require adequate insurance as a condition of financing.
The protection gap in emerging markets
The $181 billion global protection gap is concentrated in emerging markets, where insurance penetration is low. In countries such as Pakistan, which suffered devastating floods in 2022, most losses are uninsured and fall on households, businesses and public budgets. Energy infrastructure in these countries is often owned by state utilities that self-insure or have limited cover. Governments and development banks have explored parametric insurance and catastrophe bonds to provide faster payouts after disasters.
How the costs reach consumers
Insurance premiums for utilities are recoverable costs in most regulatory frameworks, which means higher premiums eventually show up in customer bills. Where insurance is unavailable or too expensive, utilities may self-insure through reserves, which also have to be funded from rates. Regulators in several western states have approved catastrophe reserve accounts or wildfire mitigation surcharges for this reason. The same logic applies to refiners and LNG exporters, though their costs are passed through prices set in competitive markets rather than regulated tariffs.
What to watch
The 2025 Atlantic hurricane season starts on 1 June, and its outcome will largely determine whether 2025 is a trend year or a peak loss year. The insurance renewals for energy assets and reinsurance programmes on 1 June and 1 July, particularly in Florida and the Gulf Coast, will show whether pricing continues to rise or stabilises. For western US utilities, the progress of wildfire investigations and any changes to state liability rules will be the main issues to follow.