Gallagher Re Natural Catastrophe and Climate Report: First Half 2025

 

Gallagher Re’s latest report reveals that the first half of 2025 has become the most expensive H1 natural catastrophe period since 2011, with US $84 billion in global insured losses - 55% above the 10‑year H1 average of US $54 billion.

U.S. wildfires and storms dominate

A staggering 87% of insured losses stemmed from just two U.S. peril types:

• January California wildfires caused approximately US $40 billion in insured losses
• Severe convective storms (SCS) across several states added US $32 billion 

Together, these events made 92% of global insured losses U.S.-centric.

Global event count drops

There were 14 billion‑dollar events worldwide - 13 in the U.S. and just 1 in APAC - marking the lowest global H1 count since 2019. Yet despite fewer events, the magnitude of U.S. losses pushed the half-year impact to record highs. 

Despite heavy losses, Gallagher Re confirms the re/insurance market remains well capitalised, starting 2025 with approximately US $769 billion in capital. Mid-year property risk-adjusted rates fell by 10–15%, suggesting insurers are still competitive with ample reinsurance buffers.

However, Gallagher Re warns that continuing budget consumption could pressure policy terms if another large-scale event occurs, noting a ~US $75–100 billion event could upend market dynamics.

Hurricane season: A critical turning point

The report highlights ENSO-neutral conditions leading into the Atlantic hurricane peak. Colorado State forecasts a near-average season (16 named storms, 8 hurricanes, 3 major). Still, with Q3 historically the costliest quarter and US peril budgets near exhaustion, stakes are high.

Chief Science Officer Steve Bowen reinforces the critical nature of the moment:

“It is clear that this is a new market reality... the question has now become: when will the insurance industry face its first USD 200 billion nominal annual loss year?”

Summary:

Record-breaking first half: The insurance industry is off to its costliest start in over a decade.

Concentrated U.S. risk: Domination by a few peril types amplifies geographic vulnerability.

Capital reserves tested: High loss rates, yet still manageable—but momentum could shift fast.

Hurricane season looming: Next few months might define whether 2025 breaks new loss records.

Gallagher Re’s H1 2025 report sounds a high‑alert bell: the re/insurance sector has weathered a severe storm so far, but the convergence of depleted budgets, U.S.-centric losses, and an uncertain hurricane season demands urgent strategic preparation to stay ahead.

Download the report