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Half-year losses nearly double the 10-year average, Swiss

Re

Institute says

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Insurers have been retreating from high-risk zones

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Full-year insured losses may exceed $150 billion

projection

By Manya Saini

Aug 6 (Reuters) - Global insured losses from natural

catastrophes reached $80 billion in the first half of 2025,

preliminary estimates from Swiss Re Institute showed on

Wednesday, driven by wildfires in California and severe

thunderstorms in the United States.

The estimate nearly doubles the 10-year average and

underscores how the insurance industry has faced a steady rise

in weather-related losses in recent years, prompting tighter

underwriting, higher premiums and renewed scrutiny of risk

models.

Swiss Re Institute said total insured losses for the year

could exceed the $150 billion projection, with natural

catastrophe activity typically higher in the second half due to

the hurricane season.

"Forecasts indicate near- to above-average activity, with

three to five major hurricanes - above the long-term average of

three," the report said.

In 2024, Hurricanes Helene, Milton and Beryl struck the

United States, devastating communities and triggering tens of

billions of dollars in insured losses.

ELEVATED CLIMATE RISKS

Faced with escalating climate risks, insurers are retreating

from high-risk zones across the U.S., leaving behind widening

coverage gaps and exposing vulnerable communities to growing

financial strain.

The Palisades Fire swept through Southern California in

early 2025, scorching more than 23,000 acres, destroying homes

and businesses, and forcing thousands to evacuate.

Swiss Re Institute estimates $40 billion in insured losses

from the Los Angeles wildfires, the largest ever from a single

wildfire event.

Wildfire losses have climbed sharply over the past decade as

rising temperatures, prolonged droughts and shifting rainfall

patterns collide with suburban sprawl and the concentration of

high-value assets, the report said.

California's insurance market has come under growing

pressure as insurers grapple with a range of climate-related

risks, including wildfires, floods and landslides, prompting

several to limit new policies or withdraw from parts of the

state.