Modelling Insured Catastrophe Losses: A Global Perspective for 2025

The global insurance industry stands at an inflection point where unprecedented natural catastrophe losses, averaging $132 billion over the past five years (compared with $104 billion in the preceding period), are no longer statistical outliers but the new reality.

Verisk’s latest models estimate the global annual losses (AAL) sustained by insureds from natural catastrophes to be $152 billion, which suggests the industry should be prepared, in any given year, for total annual insured property losses from natural catastrophes that far exceed that amount.

Frequency perils, including severe thunderstorms, winter storms, wildfires, and inland floods, now represent nearly two-thirds of the $152 billion modeled AAL, reshaping the risk landscape that has historically been dominated by singular large events such as tropical cyclones or earthquakes.

Globally, these perils have the potential to continue eroding earnings for insurers and, in some cases, for reinsurers, depending on markets and treaty structures.

Verisk’s comprehensive approach to catastrophe modelling transforms complex global risk into actionable intelligence for the insurance industry.

The company produces this annual report using the same global suite of catastrophe models and software offerings available to its clients.

All Verisk catastrophe models leverage the same completely re-architected shared financial framework, enabling seamless risk quantification across diverse portfolios and geographies.

The metrics derived from these models represent more than statistical measures: they are strategic tools that can reveal market opportunities and guide capital allocation decisions.

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