Natural disaster losses worldwide fell sharply to $224 billion by 2025, reinsurer Munich Re said on Tuesday, but warned of a still “alarming” picture of extreme weather events likely driven by climate change.
The number was down nearly 40% from a year earlier, in part because no hurricane hit the US mainland for the first time in years.
Nevertheless, “the big picture was alarming in terms of floods, severe… storms and wildfires in 2025”, said Munich Re, a Germany-based provider of insurance to the insurance industry.
The year’s costliest disaster came in the form of wildfires in Los Angeles in January, with total losses of $53 billion and insured losses of about $40 billion, Munich Re said in its annual catastrophe report.
It was striking how many extreme events were likely to be affected by climate change by 2025, and it was just a coincidence that the world was spared potentially greater losses, according to the group.
“The planet is running a fever and as a result we are seeing a cluster of severe and intense weather events,” said Tobias Grimm, Munich Re’s chief climate scientist. AFP.
Last month, Swiss Re, another top player in the reinsurance industry, also reported a big drop for 2025, putting total losses at $220 billion.
According to Munich Re’s report, insured losses for 2025 came in at $108 billion, also a significant drop from last year.
About 17,200 lives were lost in natural disasters worldwide, significantly higher than about 11,000 in 2024 but below the 10-year average of 17,800, it said.
Grimm said 2025 was a year of “two faces”.
“The first half of the year was the most expensive loss period the insurance industry has ever seen,” he said – but the second half saw the lowest losses in a decade.
LA forest fires, Myanmar earthquake
It is now the accumulated costs of smaller disasters – such as local floods and forest fires – that have the biggest impact.
Losses from these events totaled $166 billion last year, according to Munich Re.
After the LA wildfires, the year’s costliest disaster was a devastating earthquake that struck Myanmar in March, which was estimated to have caused $12 billion in losses, only a small portion of which was insured.
Tropical cyclones caused about $37 billion in losses.
Jamaica was hit by Hurricane Melissa, one of the strongest hurricanes ever to hit land, generating losses of around $9.8 billion.
Broken down by region, total U.S. losses were $118 billion, of which $88 billion were insured — about the same as an estimate of $115 billion in total losses from the U.S. nonprofit Climate Central.
The Asia-Pacific region had losses of about $73 billion — but only $9 billion was insured, according to the report.
Australia has had its second costliest year in terms of total losses from natural disasters since 1980 due to a series of severe storms and floods.
Europe saw losses of $11 billion. Natural disasters in Africa led to losses of $3 billion, of which less than a fifth was insured.
The report comes at a time when skepticism about green policies is growing, especially since the return to power of US President Donald Trump, who mocks climate science as a “hoax”.
But Grimm warned that the Earth “continues to warm”.
“More heat means more humidity, heavier rainfall and higher wind speeds – climate change is already contributing to extreme weather,” he said.
