Zurich (AFP) – Natural disasters caused $135 billion in economic losses globally in the first half of 2025, fuelled by the Los Angeles wildfires, reinsurer Swiss Re said Wednesday. Swiss Re, which serves as an insurer of insurance companies, noted that first half losses were up from the $123 billion recorded in the first half of 2024.
The Zurich-based reinsurance giant estimated that of this year’s first half losses, $80 billion had been insured, which is almost double the 10-year average in 2025 prices. The Los Angeles blazes in January constituted the largest-ever insured wildfire loss event, reaching an estimated $40 billion, according to Swiss Re. The report indicated that the “exceptional loss severity” of the fires was attributed to prolonged winds, a lack of rainfall, and “some of the densest concentration of high-value single-family residential property in the US.”
Swiss Re remarked that losses from wildfires had risen sharply over the past decade due to rising temperatures, more frequent droughts, and changing rainfall patterns, in addition to greater suburban sprawl and high-value asset concentration. “Most fire losses originate in the US and particularly in California, where expansion in hazardous regions has been high,” it stated. Notably, before 2015, wildfire-related insured losses made up around one percent of all natural catastrophe claims, but now account for seven percent.
Insured losses from severe thunderstorms amounted to $31 billion in the first half of 2025. The second half of the year is typically more costly for insurers due to damage during the North Atlantic hurricane season. If current loss trends continue, global insured losses from natural catastrophes in 2025 could exceed the Swiss Re Institute’s projections of $150 billion.
“The strongest lever to increase the resilience and safety of communities is to double down on mitigation and adaptation. It’s here that everyone can help reduce losses before they occur,” said Swiss Re’s group chief economist, Jerome Haegeli. “While mitigation and adaptation measures come at a price, our research shows that, for example, flood protection measures such as dykes, dams, and flood gates are up to 10 times more cost-effective than rebuilding.”
The March earthquake in Myanmar was among the major natural disasters in the first six months of the year, with tremors felt in neighbouring Thailand, India, and China. In Thailand alone, insured losses reached $1.5 billion. Overall, while natural disasters caused $135 billion in economic losses in the first half of 2025, man-made disasters—which include industrial accidents—caused another $8 billion in losses, of which $7 billion were insured losses.
© 2024 AFP
