Global insured catastrophe losses forecast to average $171 billion annually

In a significant development for the insurance industry, global insured catastrophe losses are now expected to average $171 billion annually, according to the latest report by Verisk, a leading data analytics and technology provider to the global insurance industry. This represents an increase of approximately $19 billion from the previous year, marking the highest estimate Verisk has reported to date.

Despite a U.S. hurricane season that saw no landfall, the industry experienced insured losses exceeding $100 billion for the sixth consecutive year. This marked a notable shift, as it signified that the underlying risk landscape has fundamentally changed. According to Rob Newbold, president of Verisk Catastrophe and Risk Solutions, "A quiet hurricane season can mislead markets into a false sense of security, leading to softer rates and more insurers taking on risk. However, 2025 reminds us that the absence of major hurricanes does not indicate a quieter catastrophe environment."

The increase in losses is attributed to several factors, including exposure growth, rising reconstruction costs, and continued development in areas prone to catastrophes. "The value of property at risk continues to grow, with severe thunderstorms and wildfires contributing more significantly to potential losses than hurricanes," noted Newbold. Severe thunderstorms alone account for 40 percent of modeled insured catastrophe risk, more than any other peril.

The 2026 Global Modeled Catastrophe Losses Report by Verisk highlights that the U.S. accounts for the majority of global insured catastrophe risk. Out of the $171 billion in global insured average annual loss (AAL), $117 billion (68 percent) is attributed to the U.S. Additionally, severe thunderstorms are the largest contributor to this AAL, ahead of tropical cyclones, earthquakes, and other perils.

Verisk's models also suggest that a severe catastrophe year could generate losses nearly three times higher than the global insured AAL. At the 100-year return period, modeled aggregate insured losses could reach $477 billion, while at the 250-year return period, losses could exceed $606 billion. Since Verisk first published this report in 2012, the estimated global insured AAL has nearly tripled, rising from $59 billion to $171 billion.

Long-term trends continue to increase the value of property at risk and the potential cost of future catastrophes. Property exposure in the countries Verisk models has grown roughly 7 percent annually since 2021, driven by both new construction and rising asset values. In the United States, residential reconstruction costs have risen about 5 percent annually since 2021, outpacing consumer inflation. More people and property are also concentrated in hazard-prone areas, as population growth continues to be concentrated in catastrophe-exposed regions.

The report underscores that a year without a U.S. landfalling hurricane can lull the market into a false sense of security. "A quiet hurricane season is not a quiet year. The $171 billion figure 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," explained Dr. Jay Guin, executive vice president and chief research officer of Verisk Catastrophe and Risk Solutions.

Furthermore, the report highlights a persistent global protection gap. Globally, only about 38 percent of economic losses from natural catastrophes are insured, corresponding to a modeled economic AAL of more than $450 billion. In Europe, the gap is wider, with only about $24 billion (22 percent) of the region's expected annual economic catastrophe losses currently insured. Verisk's models project that in the hardest-hit areas, insurance coverage is significantly lower, with flash floods in Central Texas and an earthquake in Myanmar serving as stark examples.

Verisk's findings emphasize the need for broader access to insurance and a clear understanding of the risk. "By expanding model coverage and making both Verisk and third-party models available through our platforms, we are helping insurers evaluate risk in more markets and identify opportunities to extend coverage to communities that remain underinsured," said Newbold.

The 2026 Global Modeled Catastrophe Losses Report is produced using the same suite of catastrophe models and software that Verisk's insurance and reinsurance clients rely on every day, covering more than 120 countries and regions. This ensures that the figures can be reproduced and tested in clients' own environments. The full report is available for review.