A new study from Gallagher Re outlines how weather events in the US influenced insured losses during the first half of 2025.
According to the H1 2025 Natural Catastrophe and Climate Report, insured losses from natural catastrophes reached at least US$84 billion globally in the first six months of the year.
That figure is approximately 55% above the 10-year average, with 92% of the insured losses tied to weather and climate-related events stemming from the US Key contributors included wildfires in California and severe convective storm activity.
In particular, Gallagher Re previously noted that Q1 2025 was among the costliest first quarters ever recorded for weather-driven catastrophe losses. Economic losses for the quarter reached at least US$110 billion, nearly double the 10-year Q1 average of US$55 billion. Insured losses totaled US$56 billion, representing a 176% increase above the average.
The surge was primarily attributed to January wildfires in the Los Angeles metropolitan area, which marked the largest insured loss event of the quarter.
While losses were elevated, Gallagher Re noted that the broader re/insurance sector has not shown significant signs of stress. According to its midyear renewal report, risk-adjusted property rates declined by an average of 10%-15%, though pricing trends varied across different segments.
The report also highlighted that severe convective storm (SCS) activity remained a primary driver of insured losses in the US, with multiple billion-dollar events recorded during the first half. By mid-May, Gallagher Re had identified eight individual SCS events with insured losses surpassing US$1 billion each.
This compares to 13 events during the same period in 2024, suggesting a slightly reduced but still significant frequency of high-cost convective storm outbreaks.
The industry began 2025 with US$769 billion in capital. Based on this level of capitalization, Gallagher Re estimates that a single-event loss in the range of US$75 billion to US$100 billion would be required to shift prevailing market sentiment and influence property reinsurance purchasing decisions during upcoming renewals.
Gallagher Re’s chief science officer, Steve Bowen (pictured above), said that the early months of 2025 were marked by several high-cost weather events.
“Though not as many as we’ve seen in recent years, it has still put us on a clear path to surpassing US$100 billion in insurance losses for the calendar year,” he said. “It is clear that this is a new market reality.”
He also noted that the idea of a US$200 billion nominal insured loss year is increasingly seen as a matter of when, rather than if.
“With the historical peak loss months in Q3 yet to come, all eyes are on the Atlantic hurricane season and otherwise staying prepared for an unexpected catastrophe event,” Bowen said.
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