Introduction
The ferocious wildfires in Los Angeles have significantly increased economic losses caused by natural disasters worldwide, reaching a staggering $135 billion in the first half of 2025, according to an initial estimate by reinsurance firm Swiss Re.
Background on Swiss Re
Swiss Re, a leading global reinsurer based in Zurich, Switzerland, provides risk transfer solutions to insurance and finance companies worldwide. Acting as a reinsurer for other insurers, Swiss Re offers insights into the overall costs of natural disasters and the amounts covered by the insurance sector.
Los Angeles Wildfires and Their Impact
The Los Angeles wildfires alone accounted for $40 billion in insured losses, highlighting the severity of these events occurring in a densely populated region with high-value assets. Swiss Re emphasizes that these losses are exceptional due to rising temperatures, more frequent drought periods, and shifts in precipitation patterns over the past decade.
Other Natural Disasters in H1 2025
Besides the Los Angeles wildfires, other natural disasters contributed to the overall losses. Severe storms in the United States resulted in $31 billion worth of insured damages, though this amount is lower than the record-breaking figures seen in 2023 and 2024. Swiss Re notes that storm-related losses have been increasing steadily due to changing weather patterns.
Global Natural Disaster Overview
In comparison to the first half of 2024, natural disaster losses globally have surpassed $123 billion. Swiss Re’s estimate indicates that insured catastrophe losses reached $80 billion in H1 2025, up from $62 billion in the same period last year.
Future Projections
Historically, the second half of the year tends to be more expensive for insurers due to hurricane damage in the North Atlantic. However, if current trends persist, insured losses could surpass Swiss Re’s projection of $150 billion for 2025.
Key Questions and Answers
- What caused the significant increase in natural disaster losses? The primary drivers are rising global temperatures, more frequent drought periods, and shifts in precipitation patterns.
- Which natural disasters contributed to the losses in H1 2025? Wildfires in Los Angeles, severe storms across the United States, and a significant earthquake in Myanmar (Burma) impacted neighboring countries like Thailand, India, and China.
- Why are storm-related losses increasing? Changing weather patterns, including more intense storms accompanied by hail and tornadoes, are contributing to the rise in storm-related insurance claims.
- What does Swiss Re project for total insured natural disaster losses in 2025? Swiss Re estimates that the total insured losses for natural disasters in 2025 could reach $150 billion.
