US natural catastrophes dominate global losses in the first half of 2025

• High overall losses of around US$ 131bn slightly lower than last year – but well above long-term average
• Fires on the outskirts of Los Angeles in January cause highest wildfire losses of all time
• Very high claims expenditure for insurers: Almost US$ 80bn, mainly driven by wildfires in the United States
• Insured losses were the second-highest in the first half of any year since 1980

Morristown, NJ (July 31, 2025) – Worldwide, natural disasters caused overall losses of around US$ 131bn in the first half of 2025 (previous year, adjusted for inflation: US$ 155bn), of which US$ 80bn was insured (in 2024: US$ 64bn). Both overall losses and insured losses were significantly higher than the average for the previous ten years and the previous 30 years (adjusted for inflation: overall losses of US$ 101/79bn, insured losses of US$ 41/26bn). Insured losses in H1 2025 were the second-highest in the first half of any year since our records began in 1980. Only in the first half of 2011 were insured losses even higher, attributable to a severe earthquake and destructive tsunami in Japan.

Weather disasters caused 88% of overall losses and 98% of insured losses, while earthquakes accounted for 12% and 2% respectively.

Climate change is a fact and is changing life on earth. Disasters like the one in Los Angeles have become more likely due to global warming and they teach us a very important lesson: people, authorities and companies must all adapt to new circumstances. The best way to avoid losses is to implement effective preventive measures, such as more robust construction for buildings and infrastructure to better withstand natural disasters. Such precautions can help to maintain reasonable insurance premiums, even in high-risk areas. And most importantly: to reduce future exposure, new building development should not be allowed in high-risk areas.
Thomas Blunck, Member of the Board, Munich Re

Devastating wildfires in the Los Angeles area

The wildfires in the greater Los Angeles area resulted in the costliest natural disaster during the first six months of 2025. Moreover, they occurred in winter, which is typically rainy. The overall loss is estimated at US$ 53bn, around US$ 40bn of which was insured. Never before had wildfires caused such extensive damage. The overall losses and insured losses due to this single event were nearly twice as high as global wildfire losses in 2018, which had previously been the most expensive wildfire year. 29 people perished in the fires.

Numerous studies indicate that climate change is increasing the risk of wildfires by elevating the frequency of conditions that cause them. But the set of circumstances regarding the LA fires is complex:

• For example, the rainy season in Southern California usually begins around October. But in 2024, there was very little rain.
• In previous years, an abundance of precipitation had conversely allowed vegetation to flourish. After a long dry phase in late 2024 and early 2025, an excess of highly flammable brush fuelled the wildfires.

Exacerbated by California’s strong winter winds, known as the Santa Ana winds, the conditions constituted a textbook scenario for wildfires. Once the fires had started on 7 January, wind gusts and gales acted like flamethrowers – flinging sparks across landscapes, in turn setting one building after another ablaze.

Chief climate scientist Tobias Grimm explains: “Strong Santa Ana winds are common in California during winter. At the same time, the wildfire season there tends to last longer than in the past because there is often less precipitation in the cooler months. This means that two accelerants, drought and strong winds, coincide more frequently. Then all it takes is just one spark in the wrong place for disaster to strike.”

Munich Re has been supporting the Institute for Business and Home Safety (IBHS)  in the USA for many years to research methods designed to prevent losses. Among other things, IBHS conducts analyses of construction designs and methods that can both strengthen the fire resistance of buildings and prevent fire from spreading from one structure to the next.

The impact of climate change on weather disasters has been shown by research many times over. There is a well-established consensus within the scientific community that climate change makes many weather-related disasters more frequent and severe. After the record year of 2024, the current year is again on its way to ranking among the warmest since the beginning of systematic record-keeping. Based on NOAA data, the annual average global temperatures in the first half of 2025 reached 1.4°C above pre-industrial levels (1850–1900), making it the second-warmest first half-year on record.

Regional Overview – Americas

The USA accounted for by far the largest share of natural disaster losses in the first half of the year – particularly due to the wildfires around Los Angeles.

In addition, there were once again numerous severe thunderstorms in the United States that triggered heavy rainfall and tornadoes. The four most expensive series of storms, including severe tornado outbreaks, occurred in March, April and May – resulting in overall losses of around US$ 19bn, of which US$ 14.6bn was insured. Overall, losses from these kinds of storms (known as severe convective storms) in the United States totalled US$ 34bn in the first six months of 2025. Around US$ 26bn of the losses were insured.

Munich Re’s media release contains additional regional overviews and links to further information.

About Munich Re

Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The group consists of the reinsurance and ERGO business segments, as well as the asset management company MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. Munich Re leverages its strengths to promote its clients’ business interests and technological progress. Moreover, Munich Re develops covers for new risks such as rocket launches, renewable energies, cyber risks and artificial intelligence. In the 2024 financial year, Munich Re generated insurance revenue of €60.8bn and a net result of €5.7bn. The Munich Re Group employed about 44,000 people worldwide as at 31 December 2024. For more information, please visit www.munichre.com.

Disclaimer

Munich Re’s NatCatSERVICE collects information from governmental agencies, scientific institutes, associations, the insurance industry, the media and other publicly available sources in order to analyse nat cat losses. NatCatSERVICE applies Munich Re’s comprehensive in-house nat cat expertise and market data from the worldwide insurance markets to its analyses. Munich Re assumes no guarantees as to the accuracy of this data, which is collected as of specific dates and can also change at any time. The information may not be used as the basis for any decision without prior professional advice and careful contextual analysis. Munich Re is not liable for damages arising from any decisions that third parties may take on the basis of this information.

Market loss estimates from similar events cannot serve as the sole basis for estimating Munich Re’s share, as the loss pattern and underwriting strategy in the respective regions may differ from event to event.

This media release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to make them conform to future events or developments.

SOURCE: Munich Re

Tags: Munich Re, Natural Catastrophes, natural disaster losses