Natural disasters, peak losses in six months: 135 billion

A first half of the year that turned out to be among the most expensive ever in terms of insured losses from catastrophic events, but for the other half of the world. Europe and Italy at least in this first half of 2025 have escaped it. An anomaly? "Unlike in the US, the level of natural catastrophe activity in Europe, and particularly in Italy, was low in the first half of 2025. This is not unusual, given the considerable variability of catastrophe activity from one year to the next,' stressed Lucia Bevere, senior catastrophe data analyst at Swiss Re.

The words come after the presentation of the Swiss Re Institute's customary report on extreme natural events and their consequences. A document that highlights how the first half of 2025 was the second most costly ever, due to fires in California and violent storms in the United States. Specifically, a total of 143 billion in economic losses are mentioned, of which 135 billion were due to natural disasters and 8 billion to man-made events. Of this sum, as much as 87 billion are insured losses, 80 billion are non-insured losses. This is almost double the 10-year average and is more than half of the USD 150 billion (at 2025 prices) expected over the 12 months, in line with a long-term growth trend of 5-7%. Considering that the incidence of natural catastrophes is usually most intense in the second half of the year, total insured losses for 2025 could therefore exceed the forecast.

In this context, the account of the forest fires in California, which caused $40 billion in insured damage, the highest loss ever recorded from such an event, is astounding.

The exceptionality of the figure was caused by a prolonged Santa Ana wind season accompanied by low rainfall. A deadly mix that destroyed more than 16,000 buildings in one of the areas with the highest real estate value in the United States. A phenomenon that unfortunately in the last decade is no longer something isolated. Whereas before 2015, insured losses related to forest fires accounted for 1% of all natural catastrophe losses, today that figure has risen to 7% and, more importantly, eight of the ten most expensive forest fires ever recorded have occurred in the last two decades.

This was compounded by losses due to the violent storms recorded in the first half of the year. In these first six months of 2025, the item reached $31 billion, lower than both the Swiss Re Institute's trend estimate ($35 billion) and the record levels recorded in 2023 and 2024. Nevertheless, thunderstorms continue to be the main cause of major damage and their year-on-year volatility only certifies their persistent threat to the extent that the Swiss Re Institute predicts that losses caused by this phenomenon will increase over time. How to get out of it? For Jérôme Haegeli, chief economist at Swiss Re Group, 'flood protection measures such as dams, levees and floodgates are up to ten times more cost-effective than reconstruction'.