The world’s insurance and reinsurance companies are duty bound to protect communities in times of troubling trends, according to a report from Swiss Re Institute.

Swiss Re said 2025 marked the sixth year insured natural catastrophe losses exceeded $100 billion, and was now set to reach $107 billion, mainly driven by Los Angeles wildfires and severe convective storms in the United States.

The year was prominent because the wildfires, treated as one $40 billion event, were the costliest ever wildfire event globally.

In an otherwise benign hurricane season, the costliest storm, Hurricane Melissa, caused estimated insured losses of up to $2.5 billion.

Most insured losses were driven by the unprecedented LA wildfire loss record in the first quarter of 2025 and severe convective storms, which remain a major global loss driver.

Overall, Swiss Re Institute estimates the year’s insured losses in 2025 at 24 per cent lower than the $141 billion recorded in 2024.

Jérôme Jean Haegeli, Swiss Re's group chief economist, said: “Amid annual volatility, insured losses keep rising. That’s why strengthening prevention, protection and preparedness is essential to protect lives and property.

“Reinsurers and the broader insurance sector have a dual role: acting as financial shock absorbers and supporting the development of resilient, risk-informed public policy and private investment that reduce future losses.”

The $89 billion in losses from US events were the main driver (83 per cent) of global insured natural catastrophe losses, mostly from the wildfires and storms.

The institute noted that the wildfire destruction was driven by a combination of weather events, such as extended hot, dry conditions and strong winds, with greater exposure — especially high-value housing expanding into wilderness zones.

Global insured losses from severe convective storms reached $50 billion this year, the third costliest year after 2023 and 2024.

There was much SCS activity in the first half of 2025 in the US, with several severe tornado outbreaks in March and May driving above-average tornado and wind reports, while hail activity remained close to average.

In Europe, notable hailstorms occurred in May and June, though insured losses were limited as the most intense activity affected regions with lower concentrations of high-value exposure.

Storms remain a major contributor to global natural catastrophe losses.

Balz Grollimund, Swiss Re's head of catastrophe perils, said: “We are observing a steady rise in losses from severe convective storms. Urbanisation in hazard-prone areas, rising asset values, higher construction costs and factors such as ageing roofs have made these storms a key peril for insurers.

“As single events rarely result in a large insured loss, it is key for insurers to consider the cumulative effect of frequent, low-loss events, along with increasing property values and repair costs.

“A more holistic view of this peril is critical to assure proper underwriting and risk management.”

Meanwhile, effective and co-ordinated early warning provided by the Pacific Tsunami Warning System saved countless lives, after an 8.8 magnitude earthquake struck off the eastern coast of Russia, generating tsunami waves that reached Hawaii and coastal areas of the US mainland.