Wildfires, Storms, Floods hit record high in insured losses
By Lonce Lamonte - January 13, 2026
The insurance industry has hit record losses due to thunderstorms, floods, and wildfires.
A fresh study has linked increasing temperatures to dangerous weather patterns. Insured losses for non-peak perils hit a $98 billion record last year, 2025. This is according to Munich Re. The company released a report on this January 13th. Losses from natural disasters, which included peak perils, like from hurricanes, hit $108 billion.
The German reinsurers’ chief climatologist said secondary perils are now “becoming more severe and more frequent in many parts of the world.” Evidence indicates climate change is playing an increasing role.
The threat posed by secondary perils has mounted recently. Insurers and investors in insurance-linked securities such as catastrophe bonds are rethinking their approach to risk. Investors note it’s more challenging to model such weather events than to model peak perils.
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The wild fires that raged through Los Angeles in January of 2025 were the costliest natural disaster for the year 2025. Losses were also driven by major thunderstorms in the central and southern United States in March 2025, Munich Re said.
2025 most likely matched 2023 as the second hottest on record. This was according to data produced by the European Union-bases Copernicus Climate Change Services. 2024 was the warmest year.
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Tobias Grimm, Munich Re’s climatologist, stated other insurers and reinsurers have seriously invested in models to assist in better predictions of losses that secondary perils can cause nothing these are already working well for wildfires and floods.
However, it’s “somewhat more challenging with severe weather such as hail and tornados, because these are very local phenomenon,” Grimm said. Avoiding building in high risk zones and also improving construction standards reduces losses.
There’s an urge for continued growth in this area if risk-adequate pricing is possible, Tobias grim also explained.
lonce@adjustercom.com, Lonce Lamonte, journalist; all rights reserved, copyright
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