Insured cat losses top $100bn for sixth consecutive year, as warming oceans alter hurricane risks: WTW

According to a recent report from Willis, a division of WTW, natural catastrophe events generated over $100 billion in insured losses in 2025. This marks the sixth consecutive year that losses have exceeded this amount, highlighting the ongoing severity and persistence of natural catastrophe risk, despite the fact that no single hurricane made landfall in the United States during that time.

The company does not give a specific estimate, but Willis does highlight some interesting trends that are developing within its latest report, which also includes contributions from Willis Re.

The findings are included in the company’s Natural Catastrophe Review, where Cameron Rye, the Director of Natural Catastrophe Analytics at Willis Re, observed that although insured losses in 2025 decreased by around $40 billion in comparison to 2024, “good luck is no substitute for sound strategy.”

“Even if 2025 can be described as a moderate loss year, catastrophe risk remains high, and physical risks continue to increase as the world warms. Insurers should act now to protect their portfolios against unsustainable accumulations of risk and prepare for a reversal of fortune,” Rye said.

Adding: “The path forward given these trends isn’t to walk away from risk, but instead to encourage investment in resilience and mitigation. Risk managers and sustainability teams can protect business value by working together, supported by advances in modelling, pricing and risk awareness.”

Key takeaways from Willis’ report include: recognising how a warming North Atlantic alters hurricane behaviour; treating wildfire as a primary driver of portfolio volatility; incorporating compound perils into risk modeling; and acknowledging that flood risk now extends beyond traditional zones due to more intense tropical storm rainfall.

On the hurricane front, the firm warns the insurance industry against complacency, noting that a year-on-year dip in losses should not provide a false sense of security

2025 marked the first year in a decade where no hurricanes made landfall in the United States, however other places were not so fortunate.

The most notable event from last year’s season was Hurricane Melissa, which made landfall over Jamaica on October 28 as a Category 5 storm.

The firm’s report explains that while it was previously uncommon for major hurricanes to form in October, as the North Atlantic has warmed, the environmental conditions that are favourable to hurricane formation are lasting later in the year.

That same warming also allows storms to become much stronger very quickly. Compared to the late 20th century, the number of storms that undergo explosive intensification (winds strengthening by almost 60 miles per hour in less than a day) has almost doubled,” the report explains.

“We know physical risks continue to increase as the world warms. And sooner or later, all lucky streaks end. Insurers should act now to protect their portfolios against unsustainable accumulations of risk and prepare for a reversal of fortune,” the firm’s report explained.

Scott St. George, Head of Weather and Climate research at the Willis Research Network, said: “Even without any hurricanes making landfall in the United States, in 2025 insured losses from natural catastrophes were still over $100 billion worldwide. That tells us the risk floor for catastrophic perils is higher than ever.

“Beyond the immediate headlines, our team of experts digs into the structural pressures, overlooked warning signs, and systemic vulnerabilities that multiplied the impact of natural catastrophes in 2025. Our perspectives on the evolving risk landscape provide advice to insurers seeking to update their view of these risks, including the burgeoning affordability crisis in many markets.”

Moving towards wildfire risk, Willis explained that for decades, wildfire experts have issued repeated warnings that prolonged drought enhanced by global warming and the continuing encroachment of communities into the wildland-urban interface would make catastrophic fires much more likely.

Before 2025, there had been eight wildfires in California with insured losses greater than $2.8 billion, with 2018’s Camp Fire being the most destructive at $12.5 billion.

“In January, we were confronted by the stark reality that wildfire can be much more severe. Together, the Eaton and Palisades Fires burned almost 60 square miles across Los Angeles County and destroyed more than 18,000 structures,” Willis said.

The report also explains that insurers have paid more than $22.4 billion to cover home, business, living expenses, auto damage, and other disaster-related claims related to the Eaton and Palisades Fires.

Once all claims are paid, total insured losses for the Los Angeles wildfires may approach $40 billion, Willis noted.

Furthermore, Willis also highlighted how cumulative damage brought on by multiple perils in quick succession, which includes earthquakes on rain saturated soil, or typhoons following seismic events, can often lead to delayed claims payments and disagreements with policy holders.

“Disaster risk financing products can be tailored to reduce the economic impact of a sequence of catastrophic events when they happen,” Willis explained.