2026 Climate and Catastrophe Insight

2026 Climate and Catastrophe Insight

2026 Climate and Catastrophe Insight

As climate change intensifies natural disasters, how can organizations build resilience & identify trends to stay relevant while protecting people and property?

Natural disasters had a huge impact in 2025. Even though the cost of overall damage was lower than in recent years, events like the California wildfires and major U.S. storms still added up to $260 billion in losses. While the total damage was down from $397 billion in 2024, the amount covered by insurance stayed high at $127 billion, reinforcing the importance of capital for recovery.

These catastrophes are a reminder that communities, businesses and governments all have a role to play in building resilience — from strengthening buildings and infrastructure to improving financial protection. The more we invest in preparedness, adaptation and risk management, the better positioned we are to reduce long-term impacts and protect people and property when the next disaster strikes.

Key Takeaways:
  1. At $41 billion, the Palisades and Eaton Fires accounted for a third of all insured losses in 2025 – marking the costliest wildfires on record globally.
  2. Severe convective storms caused $61 billion in insured losses globally, the third highest SCS annual total in history.
  3. Hurricane Melissa caused $11B in losses, nearly $9B in Jamaica alone - over $40% of its GDP - and became the nation's costliest hurricane.
  4. 2025 was the third hottest year on record, with extreme heat causing at least 25,000 global fatalities and major economic impacts.
  5. Severe flood-related losses across South and Southeast Asia revealed significant underinsurance and opportunities to address this protection gap.

Deciphering the Protection Gap

The protection gap fell to a record low of 51%, due to the large concentration of losses in the U.S. which has higher insurance coverage. However, half of global economic losses remained uninsured, highlighting the ongoing protection gap in emerging markets and the opportunity for insurers and financial institutions to expand coverage and develop innovative risk‑transfer solutions.

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