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Wildfires And Severe Storms Lead Losses Caused By Climate Events In 2025. Insurance Sector Already Totals US$ 84 Billion.
Wildfires and severe storms caused massive losses to insurers in the first six months of 2025.
According to a report from reinsurance broker Gallagher Re, global losses from climate events totaled US$ 84 billion just in the first half, the largest figure on record since 2011.
The study, released this week, highlights the United States as the most impacted country, with US$ 81 billion attributed directly to climate-related disasters and weather conditions.
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The severity and frequency of these events are shaping a “new market reality,” according to Gallagher Re itself, which estimates that the value of insurance losses will exceed US$ 100 billion by the end of 2025.
The report draws attention to the increasing risks faced by insurers, governments, and property owners around the world.
Wildfires In California Lead Losses
The most expensive natural disaster of the year so far was the series of wildfires that hit Southern California in January.
With intense flames spreading rapidly, the fires destroyed entire communities in Los Angeles County and forced thousands of people to leave their homes.
State Farm General, California’s largest insurer, reported receiving more than 8,700 claims, totaling over US$ 1 billion in payments to affected customers.
Due to the financial impact, the company requested an emergency rate increase of up to 22% for property owners, reinforcing the economic burden of climate events on consumers.
Severe Storms Worsen Damage In The Midwest And South
In addition to wildfires, climate events included severe storms that caused tornadoes, intense winds, and hail across various regions of the United States.
The most critical period occurred between March 13 and 16, when a series of storms devastated cities in the Midwest and South of the country.
According to Gallagher Re, this outbreak alone was responsible for nearly US$ 8 billion in insured losses, making it the fourth most costly event ever recorded for insurers.
In total, these storms caused US$ 33 billion in damages in the U.S., demonstrating the intensity and recurrence of these phenomena in 2025.
Outside The U.S., Financial Impact Is Smaller But Still Relevant
Despite the concentration of losses in the United States, other regions of the world also faced extreme climate events.
The main event occurred in April, with an earthquake between Myanmar and Thailand. Although still under analysis, Gallagher Re estimates that insured losses will exceed US$ 1 billion after the claims are finalized.
Interestingly, this was the second year since 2006 in which insured losses outside the U.S. were below US$ 10 billion in the first half, a figure that reinforces the asymmetry of climate impacts globally.
A New Era For The Insurance Market
The Gallagher Re report warns that the effects of climate events on the insurance sector have ceased to be isolated.
The current pattern of recurring, high-value losses indicates a scenario of ongoing risk, pressing operators, regulatory authorities, and consumers to adapt quickly.
The combination of factors such as global warming, disordered urbanization, and insufficient infrastructure exacerbates the impact of natural phenomena.
Thus, insurers need to reassess pricing and risk management models, while vulnerable communities face the challenge of protecting their assets against increasingly frequent disasters.
Sector Projects Even Greater Losses By The End Of 2025
Based on the trends observed in the first half, analysts at Gallagher Re estimate that total insured losses will exceed US$ 100 billion by December.
This scenario places 2025 among the most expensive years in history for the insurance sector. The report warns that if extreme climate events continue at this pace, the financial impact may exceed previous forecasts, further pressuring the market and revealing the urgency for public policies on adaptation and prevention.
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