Howden Re has released its 2025 natural catastrophe snapshot, detailing key events and insured loss drivers across global markets. The report found that peak perils accounted for a limited share of the year's overall insurance losses.
The January wildfires in Southern California emerged as the year's costliest catastrophe. The Palisades and Eaton fires ignited on Jan. 7 amid drought conditions, red-flag warnings and Santa Ana winds reaching 100mph, damaging or destroying more than 15,000 structures.
The findings align with Munich Re's annual analysis, which reported that natural disasters generated approximately US$224 billion in global losses during 2025, with insurers covering around US$108 billion. This marked the second consecutive year that insured losses exceeded US$100 billion.
Munich Re estimated the Los Angeles wildfires generated overall losses of approximately US$53 billion, with insured losses of roughly US$40 billion, making them the costliest natural disaster of the year.
The Palisades fire, which affected Pacific Palisades, Topanga and Malibu, generated higher insured losses due to elevated property values in those areas. The Eaton fire destroyed more structures but produced lower insured losses given comparatively modest home values in Altadena.
According to Howden Re, many insurers sold subrogation rights to hedge funds. Eaton recoveries fetched 40 to 50 cents on the dollar, while Palisades sold for pennies. A new California law grants utility funds right of first refusal when cedents sell subrogation rights. Nearly a year later, only about 16% of rebuild permits have been issued.
Severe storm losses in the US came in below average for 2025, contrasting with the previous five years, all of which exceeded US$60 billion. The costliest severe weather event since the 2022 Christmas freeze occurred in March, impacting the Eastern US from Austin, Texas, to Lake Ontario.
In Europe, Storm Éowyn struck on Jan. 21, becoming the UK's most powerful windstorm in a decade with 100 mph gusts recorded in Northern Ireland. The storm was Ireland's strongest since 1998.
Hurricane Melissa became the strongest storm to make landfall in Jamaica, surpassing Hurricane Gilbert's 1988 record. Industry losses are expected below US$5 billion, though economic damage to Jamaica alone reached an estimated US$10 billion.
