Global Catastrophe Losses Hit $171B Annual Benchmark, Verisk Warns Insurers

Global insured catastrophe losses are now expected to average $171 billion annually, up $19 billion from last year and the highest estimate ever reported by data analytics firm Verisk. The new benchmark, released in Verisk's 2026 Global Modeled Catastrophe Losses Report, signals that the insurance industry must prepare for a fundamentally riskier environment, even after a year with no U.S. hurricane landfalls.

The report, published September 1, 2026, marks the sixth consecutive year that global insured catastrophe losses exceeded $100 billion. This trend is driven not by singular mega-events like hurricanes or earthquakes, but by record-setting wildfires and severe thunderstorm activity that produce widespread hail, wind, and tornado damage across many communities.

What is driving the rising catastrophe loss benchmark?

Verisk's headline figure represents the global insured average annual loss (AAL), a modeled long-term estimate of catastrophe risk derived from simulations across the company's global suite of models. It is not a prediction for any single year, but a benchmark for insurers to evaluate potential losses across a wide range of events, perils, and regions.

Several long-term trends are pushing potential losses higher, independent of weather patterns:

• More property to insure: Property exposure in modeled countries has grown roughly 7 percent annually since 2021.
• Rising reconstruction costs: U.S. residential reconstruction costs have risen about 5 percent annually since 2021, outpacing consumer inflation.
• Development in hazard-prone areas: Population growth continues to concentrate in catastrophe-exposed regions, including flood plains and wildfire zones.

In England, for example, 7.1 percent of single-family homes already sit in the 100-year flood plain, and one in nine new homes built between 2022 and 2024 was built in a flood-risk area. Verisk projects this could rise to one in seven new homes by 2050.

Why a quiet hurricane season is not a quiet year

Despite no U.S. hurricane landfalls in 2025, estimated losses still exceeded $100 billion. Rob Newbold, president of Verisk Catastrophe and Risk Solutions, cautioned that a quiet season can lull markets into complacency.

“A quiet hurricane season can lead markets to respond as if risk has eased: rates soften, insurers keep more risk on their own books, and more capital competes to write new business,” Newbold said. “But 2025 reminds us that the underlying risk landscape has changed and years without significant losses from U.S. hurricane activity no longer signal a quieter catastrophe environment.”

How severe could a worst-case catastrophe year be?

Verisk's report also examines increasingly severe but plausible loss scenarios. At the 100-year return period, which represents a 1 percent annual likelihood, modeled aggregate insured losses reach $477 billion. At the 250-year return period, losses reach $606 billion.

Adding a significant U.S. landfalling hurricane to a year like 2025 could push annual insured catastrophe losses to roughly $200 billion, according to Verisk's models. For consumers, such a year could mean increased premiums, changes to underwriting terms, and in the hardest-hit areas, less available coverage.

What is the global protection gap?

The report quantifies a persistent protection gap. Globally, only about 38 percent of economic losses from natural catastrophes are insured, corresponding to a modeled economic AAL of more than $450 billion.

In Europe, the gap is wider: of the region's $110 billion in expected annual economic catastrophe losses, only about $24 billion (22 percent) is currently insured. In July 2025, flash floods in Central Texas, the deadliest flood event in nearly five decades, occurred in a region where the national flood insurance take-up rate is about 3 percent. When an earthquake struck Myanmar in March 2025, insurers covered less than $100 million of roughly $12 billion in economic losses.

How has the loss benchmark evolved since 2012?

Since Verisk first published this report in 2012, the estimated global insured AAL has nearly tripled, rising from $59 billion to $171 billion. The change reflects expanded model coverage to more than 20 additional countries, advances in science and data, and growth in insured exposure.

Dr. Jay Guin, executive vice president and chief research officer of Verisk Catastrophe and Risk Solutions, emphasized the importance of a broad perspective.

“The $171 billion figure is not determined by the outcome of one hurricane season or one year of catastrophe losses,” Guin said. “It reflects a wide distribution of potential events across perils and regions, using current exposure data and a view of hazard grounded in the near-present climate.”

Frequently asked questions about catastrophe insurance losses

What does the $171 billion annual loss estimate mean for insurers?

The figure is a benchmark for insurers to evaluate potential losses across a wide range of events, perils, and regions. It helps them maintain underwriting discipline and make informed pricing, capital allocation, and risk transfer decisions.

Which peril contributes most to global insured catastrophe risk?

Severe thunderstorm accounts for 40 percent of modeled insured catastrophe risk, more than any other peril. It remains the largest contributor ahead of tropical cyclone (27 percent), earthquake (10 percent), winter storm (9 percent), flood (7 percent), and wildfire (6 percent).

How much of global catastrophe losses are insured?

Only about 38 percent of economic losses from natural catastrophes are insured globally. In Europe, the insured share drops to 22 percent.

What could a severe catastrophe year cost the insurance industry?

At the 100-year return period, modeled aggregate insured losses reach $477 billion. At the 250-year return period, they reach $606 billion, nearly three times the annual average.

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