Global Insured Catastrophe Losses Expected to Average $171 Billion Annually: Verisk

The insurance industry should be prepared to withstand $171 billion in insured catastrophe losses, on average in a given year, up $19 billion from a year ago, according to Verisk.

In its highest estimate reported to date, the data analytics and technology provider said the industry’s loss benchmark increased despite the fact that the U.S. in 2025 had no hurricane landfalls for the first time in a decade.

The rise reflects continued growth in property values and insured values worldwide, Verisk added.

“A quiet hurricane season can lead markets to respond as if risk has eased: rates soften, insurers keep more risk on their own books, and more capital competes to write new business,” said Rob Newbold, president of Verisk Catastrophe and Risk Solutions, in a statement accompanying the report. “But 2025 reminds us that the underlying risk landscape has changed and years without significant losses from U.S. hurricane activity no longer signal a quieter catastrophe environment.”

Verisk explained that a year without a U.S. landfalling hurricane can lull the market toward thinner pricing and looser underwriting terms, “precisely when discipline matters most.”

“The $171 billion figure is not determined by the outcome of one hurricane season or one year of catastrophe losses,” according to Dr. Jay Guin, executive vice president and chief research officer of Verisk Catastrophe and Risk Solutions. “It reflects a wide distribution of potential events across perils and regions, using current exposure data and a view of hazard grounded in the near-present climate. That broader perspective helps the industry prepare for loss scenarios that historical experience alone may not reveal.”

New Normal for Global Insured Cat Losses

For the sixth straight year, global insured catastrophe losses exceeded $100 billion — a result driven not by severity perils like earthquakes and hurricanes, but by record-setting wildfires and significant severe thunderstorm activity, which produced widespread hail, wind and tornado damage across many communities rather than a single catastrophic event. (Editor’s note: These frequency perils are also known as secondary perils.)

“A more dynamic risk environment underscores how catastrophe models help insurers maintain underwriting discipline and make informed pricing, capital allocation and risk transfer decisions based on the full range of risk, not just the outcome of a single season,” Newbold added.

Verisk provided additional insights to put the benchmark number into context:

• The United States accounts for the majority of modeled insured catastrophe risk – or 68% ($117 billion) of the $171 billion benchmark.

• Severe thunderstorm accounts for 40% of modeled insured catastrophe risk, more than any other peril. These so-called severe convective storms (SCS) remain the largest contributor to Verisk’s global insured AAL, ahead of tropical cyclone (at 27%), earthquake (10%), winter storm (9%), flood (7%) and wildfire (6%). Frequency perils, rather than a single hurricane, continued to drive industry losses in 2025.

• A severe catastrophe year could generate losses nearly three times higher than the global insured AAL. The report examined increasingly severe, but plausible, loss scenarios: At the 100-year return period – commonly used in the industry to describe a scenario with a 1% annual likelihood – modeled aggregate insured losses reach $477 billion. At the 250-year return period, losses reach $606 billion.

Verisk explained that its global insured average annual loss (AAL) figure of $171 billion is not a prediction of losses in 2026, or in any other individual year. “Rather, it serves as a benchmark insurers can use to evaluate potential losses across a wide range of events, perils and regions.”

Since Verisk began publishing this benchmark report in 2012, the estimated global insured AAL has nearly tripled, rising from $59 billion to $171 billion, the report said. (The original 2012 figure was expressed in 2012 dollars.)

Verisk said the change also reflects its investment in expanding model coverage to more than 20 additional countries and regions, advances in science, data and modeling methods, updates to Verisk’s view of risk, and growth in insured exposure.

Other Factors Driving Higher Losses

Catastrophe losses are shaped by more than the number or severity of storms, wildfires or earthquakes in a given year, Verisk said, pointing to higher property exposures, rising rebuilding costs, and the fact that more people and property are located in hazard prone areas.

Verisk went on to detail the long-term trends that are combining to increase insured catastrophe losses independently of weather patterns:

• Property exposure in the countries Verisk models has grown roughly 7% annually since 2021, driven by both new construction and rising asset values.

• In the United States, residential reconstruction costs have risen about 5% annually since 2021, outpacing consumer inflation and increasing the potential cost of catastrophe losses even when hazard activity remains unchanged.

• Population growth continues to be concentrated in catastrophe-exposed regions, while development expands in flood plains, wildfire zones and other high-risk locations. In England, for example, 7.1% of single-family homes already sit in the 100-year flood plain, and one-in-nine new homes built between 2022 and 2024 were built in flood-risk areas, which Verisk warned could rise to one-in-seven new homes by 2050.

About the Report

Verisk said its 2026 Global Modeled Catastrophe Losses Report is produced using the same suite of catastrophe models and software used by Verisk’s insurance and reinsurance clients, covering more than 120 countries and regions.

Photograph: Debris is seen in front of a damaged house after a tornado struck on Monday, July 27, 2026, in Menasha, Wis. (AP Photo/Kayla Wolf)