Global insured losses reached about $114 billion through the first three quarters of 2025 despite a relatively quiet third quarter, pointing to the growing influence of secondary perils on the re/insurance market.

Economic losses, by contrast, were about $203 billion, which were notably below historical norms. This reflected a period of low activity in the July-to-September quarter.

A new catastrophe report by Aon found that while overall disaster activity slowed in the July-to-September period, payouts outpaced long-term trends.

“Despite the lack of major events, average Q1 to Q3 insured losses still substantially exceeded the long-term average as a result of major payouts from wildfires and [severe convective storms],” the report said.

The United States accounted for nearly 90 per cent of global insured losses during the period.

The findings show a shift away from traditional peak risks like hurricanes towards more frequent, harder-to-model events including SCS and wildfires. It is a trend with implications for Bermuda’s reinsurance market, which is heavily exposed to US catastrophe risk.

Although Atlantic hurricane risk is still the single biggest exposure for Bermuda, the Bermuda Monetary Authority has also recently pointed more and more to secondary perils as key drivers.

Karen Clark, founder of Karen Clark and Co, the catastrophe modelling firm, told The Royal Gazette in 2024 that severe convective storms would continue to drive losses.

She said there was often a serious underestimation of SCS risks, and that cat models that can predict hurricane risks are not effective for these types of storms.

Even as SCS drives losses, the Aon report also pointed to longer-term structural changes in wildfire risk, which alone generated tens of billions of dollars in losses in the first three quarters of 2025.

“Recent events show wildfires are now a structural issue, not just seasonal,” Aon said.

That shift may drive demand for reinsurance capacity and more sophisticated risk modelling, the report found, as climate change has an impact on extreme weather events.

Although total economic losses for the year to date were below historical averages, insured losses remained high. It is a dynamic that typically supports pricing discipline across the reinsurance sector, the report said.

For Bermuda reinsurers, the combination of higher but manageable losses and changing risk patterns points to a market likely to remain active heading into year-end renewals, the report said.

“Strong underlying profitability allowed insurers to absorb the impact of the 2025 wildfires without difficulty,” the report said.