Around the world, the insurance industry is facing growing average annual losses from natural catastrophes. A new report from global data analytics and technology provider, Verisk says modelled non-crop property and casualty (P&C) losses rose 25 per cent when compared to 2024 figures. Severe thunderstorms and other frequency perils now account for two thirds of total potential losses, states the report.
Entitled Modeling Insured Catastrophe Losses: A Global Perspective for 2025, they say the global modelled insured average annual property loss (AAL) from natural catastrophes has risen to $152-billion (figures in U.S. dollars).
“This means that in any given year the insurance industry should now be prepared for total annual insured property losses from natural catastrophes that far exceed that amount,” they write.
“Severe thunderstorms, winter storms, wildfires and inland floods – also known as frequency perils, since they take place relatively often compared to larger events like tropical cyclones and earthquakes – now account for two thirds ($98-billion) of the total modelled AAL,” they add, saying this is a 12 per cent increase when compared to 2024 losses.
“Looking specifically at severe thunderstorms in a longer-term view, we see a 59 per cent increase in severe thunderstorm events generating insured losses exceeding $1-billion from 2020 to 2024, as compared with the prior five years.”
The annual report also looks at global protection gaps and at exposure growth.
Property exposure in the firm’s modelled countries grew seven per cent annually between 2020 and 2024, driven by inflation and construction in high-hazard areas. “Approximately one per cent of year-on-year AAL increases are attributable to long-term climate effects,” says the report.
