Hurricane Ian destroyed homes in Florida residential area. Credit: bilanol/Adobe Stock
The insurance industry faces another year in record losses as natural catastrophes escalate, according to a report by Willis Research Network.
In 2025, insured losses are on pace to exceed $100 billion for the sixth consecutive year, the data shows, with a major inflection point on global risk and a rising concern being more than the size of losses—and including the ‘how and where’ these events are happening, and the potential risk to communities and infrastructure.
“The insurance industry and its clients are confronted by two escalators that are combining to increase the risk of catastrophe,” said Head of Weather & Climate Research of the Willis Research Network, Scott St. George.
“Yes, the insurance industry's overall exposure to natural catastrophe has gone up because people continue to move into places that are prone to hurricane wildfires, floods and other perils,” he added. “But on top of that—climate change has made many of those perils more severe or more frequent or is expected to do so in the near future. If we allow the world to continue to warm, those risks will keep going up. Insurers absolutely need to account for both factors when making decisions about the upcoming year and beyond.”
Other key insights include:
- Increasing insurance losses: Once considered outliers, high-loss years have become the norm. Intensifying hazards, population growth, and climate volatility are driving structural change across the industry.
- Expanding frontiers of risk: From the Los Angeles wildfires to Southeast Queensland’s first cyclone in half a century, 2025 is proving that extreme events are hitting both expected and previously lower-risk regions.
- Looking ahead at hurricane season: With above-average hurricane activity forecast and shifting El Niño and La Niña dynamics, the report’s Outlook section offers guidance on how to interpret and act on the latest climate signals.
Meanwhile, “2025 ranks as the second- or third-most active year on record for local reports of damaging winds and tornadoes, respectively for the first half of the year," Willis Research Network said in the report. "Hail reports have hewed close to the long-term average, with large hailstones reported in Texas, Oklahoma, Minnesota and Wisconsin.”
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