The global modelled insured average annual property loss (AAL) from natural catastrophes has increased to $152 billion, according to the latest annual report from Verisk’s Extreme Event Solutions business.
This means that the insurance industry should now be prepared for total annual insured property losses from natural catastrophes that far exceed that amount.
The report highlighted a $32 billion increase in non-crop global modelled insured AAL over 2024. Over the past five years, insured losses have averaged $132 billion per year, up from $104 billion in the preceding five-year period.
Of the $152 billion modelled AAL, frequency perils—including severe thunderstorms, winter storms, wildfires, and inland floods—now account for nearly two-thirds ($98 billion) of the total figure, a 12% increase in share over 2024. This marks a shift from a risk landscape historically dominated by singular large events, such as tropical cyclones or earthquakes.
Rob Newbold, President of Verisk Extreme Event Solutions, said, “This year’s modelled losses reflect a fundamental shift in the risk landscape. Frequency perils are driving sustained, high-impact losses across geographies, and insurers must evolve their strategies to meet this challenge head-on.
“Natural catastrophe losses are no longer statistical anomalies—they are the new normal. Our models are designed to help the industry anticipate and absorb these shocks with confidence.”
The report also noted accelerated exposure growth, with global property exposure in Verisk-modelled countries averaging 7% annual growth from 2020–2024, driven by inflation and ongoing construction in high-risk areas. Additionally, more than half the world’s population now lives in urban areas highly exposed to natural hazards.
Verisk estimates that long-term climate effects account for approximately 1% of year-on-year AAL increases.
The report revealed that global insured losses now represent more than 38% of global economic losses when adjusted for inflation, corresponding to an economic AAL of more than $395 billion.
Regional protection gaps remain significant. In Asia and Latin America, insured losses cover only 12% and 32% of economic losses, respectively, due to low insurance take-up rates despite increasing exposure and urbanisation.
In contrast, about 48% of North America’s economic losses are insured, reflecting high insurance penetration; however, wildfire risk continues to escalate. The 2025 Palisades and Eaton fires caused up to $65 billion in economic losses, 60–70% of which were insured.
Europe and Oceania had insured shares of 39% and 48%, respectively, with exposure growth driven by inflation and urban expansion, with annual growth rates exceeding 8% in some regions.
Verisk introduced new inland flood models for Malaysia, Indonesia, and Ireland, and updated models for Australia (bushfire), Mexico (earthquake), UK (flood), US (severe thunderstorms), and South Korea (typhoon).
The Verisk Wildfire Model for the US became the first catastrophe model to complete evaluation under California’s new PRID framework, supporting broader insurance availability in wildfire-prone areas.
Newbold concluded, “The report emphasises the need for insurers and reinsurers to adopt forward-looking risk models that reflect today’s built environment and climate realities. Verisk’s catastrophe models, used with Touchstone and Touchstone Re, help companies benchmark potential losses and manage catastrophe risk with confidence.”
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