Severe convective storms have overtaken tropical cyclones as the costliest insured peril of the 21st century, according to new findings that reveal shifting risk patterns for global reinsurers.

In its 2026 Climate and Catastrophe Insight report, professional services firm Aon plc said global economic losses from natural disasters reached $260 billion in 2025, while insured losses remained high at $127 billion, marking the sixth consecutive year that insured losses exceeded $100 billion.

While total economic losses were the lowest since 2015, the report said insured losses remained high because of the frequency and severity of medium-sized catastrophe events, particularly in the United States. Those events continue to drive a large share of global industry losses despite the absence of a major global catastrophe year.

Severe convective storms, which include hail, tornadoes and straight-line winds, generated $61 billion in insured losses globally in 2025, the third-highest total on record for the peril. Aon said more high-frequency storm losses have reshaped loss patterns for insurers and reinsurers with major US exposure.

The US accounted for more than 54 per cent of global economic losses in 2025, with insured losses of $103 billion representing 81 per cent of global industry losses. Wildfires in California were the costliest events of the year, producing $58 billion in economic losses and $41 billion in insured losses.

Outside the US, the report said, insured penetration remained uneven. Globally, insurers covered about 49 per cent of economic losses, leaving a protection gap of 51 per cent. Aon noted that this figure was the lowest on record.

Aon said the findings point to a risk environment in which capital providers, reinsurers and insurers are focused more and more on frequency risk, aggregation and capital efficiency as loss patterns shift.

For Bermudian-based reinsurers, the report pointed to continued demand for alternative risk transfer solutions, including catastrophe bonds and parametric insurance structures. Parametric coverage played a role in post-event liquidity after Hurricane Melissa in the Caribbean, where Jamaica got more than $650 million within weeks of landfall through catastrophe bond protection.

The report also documented $30 billion insured loss events in 2025, well above the long-term average of $17 billion.