A year marked by destructive wildfires, powerful storms and deadly earthquakes did not produce a capital-shocking loss for the global reinsurance market, according to Howden Re’s 2025 natural catastrophe snapshot.

The report said insured losses were driven largely by localised events and secondary perils rather than a single peak catastrophe, which reinforces the resilience of global reinsurance capital. It is a trend with direct relevance for Bermuda, which remains a major centre for catastrophe reinsurance and insurance-linked securities.

Bermudian-based carriers are expected to absorb close to $10 billion in insured losses from the January 2025 California wildfires, while total catastrophe exposure underwritten from the island exceeds $220 billion globally, according to regulatory and market estimates.

“After 2025, it is clear that catastrophes happen and large losses are no longer anomalies,” the report stated.

In the United States, an active but comparatively low-impact hurricane season and below-average severe storm losses contrasted with the past five years, all of which recorded more than $60 billion in severe storm losses.

The biggest insured losses of the year stemmed from wildfires in Southern California, where the Palisades and Eaton fires destroyed more than 15,000 structures. The Palisades fire, in particular, generated large insured losses because of high property values, despite covering a smaller area.

Howden Re noted that wildfire losses were increasingly driven by asset concentration rather than footprint size.

Elsewhere, Hurricane Melissa became the strongest storm ever to make landfall in Jamaica, causing an estimated $10 billion in economic damage. Insured losses, however, were expected to remain below $5 billion due to the major protection gap.

Existing climate relief funds, parametric products and catastrophe bonds — such as the record $70.8 million paid out by the Caribbean Catastrophe Risk Insurance Facility SPC — were expected to cover less than $1 billion of the losses, according to the report.

In Asia, a magnitude-7.7 earthquake in Myanmar caused more than 5,300 fatalities but resulted in minimal insured losses due to very low insurance penetration, while Super Typhoon Ragasa caused about $1.3 billion in insured losses despite its intensity.

Howden Re said: “While the timing, location and nature of these events remain uncertain, they underscore the need for robust, multifaceted approaches to risk transfer and portfolio management.”