The average estimated annual insured property loss from natural events around the world has risen to $152 b
illion – up sharply from recent years – and much of that is from severe thunderstorms, winter storms, wildfires and f
loods, not large disasters, the data analytics firm Verisk said in a new report.
“This year’s modeled losses reflect a fundamental shift in the risk landscape. Frequency perils are driving sustain
ed, high-impact losses across geographies, and insurers must evolve
their strategies to meet this challenge head-on,” Rob Newbold, president of V
erisk Extreme Event Solutions, said in a statement.
The 2025 Global Perspective report found a $32 billion increase in non-crop global modeled insurance average a
nnual property loss (AAL) over 2024. Over the past five years, insured lo
sses have averaged $132 billion per year, compared to $104
billion in the preceding five-year period, the company said.
The estimated loss amounts are averages, which means the insurance
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industry should be prepared for losses in a given year that far exceed the average.
“Globally, these perils have the potential to continue erodin
g earnings for insurers and, in some cases, for reinsurers, depending on
markets and treaty structures,” the report warned.
Property exposure in countries modeled by Verisk grew 7% annually from 2020 to 2024, driven by inflation and b
y continued building in high-hazard areas, the report noted. About 1%
of the annual increases can be attributed to long-term climate change.
In Asia and Latin America, insured losses account for only 12% and 32% of economic losses, respectively, compared to 48% in North America, Verisk noted.
The report stressed that frequency perils, often in the form of smaller storms or fire events as opposed to large, w
idespread disasters, are having an outsized effect on loss costs.
“Event frequency has increased substantially, with frequency perils acco
unting for $98 billion of the total $152 billion AAL—a 12% increase in share over 2024,” the report found.