Global insurers are bracing for a potential rise in catastrophe-related claims in 2026, as new projections from Swiss Re point to a steady escalation in insured losses driven by climate risks and rising exposure.
The reinsurer estimates that insured losses from natural disasters could reach about $148 billion this year, reflecting a return to long-term trends after what it described as a relatively moderate 2025. However, in a severe loss scenario, claims could climb as high as $320 billion, underscoring the growing volatility facing the global insurance industry.
According to Swiss Re, the outlook is based on historical loss patterns, which show a persistent upward trajectory in catastrophe-related claims. The firm noted that global insured losses stood at $107 billion in 2025, a figure that, while below trend, was still elevated due to the high frequency of events affecting densely populated and high-value areas.
A defining feature of last year’s loss profile was the dominance of so-called “secondary perils” such as wildfires, floods, and severe convective storms. These events accounted for 92 percent of total insured losses globally, marking a record share and highlighting a shift away from traditional large-scale disasters like hurricanes as the primary drivers of claims.
Wildfires in Los Angeles alone generated about $40 billion in insured losses, making them the costliest wildfire events on record, while severe convective storms contributed an additional $51 billion globally. By contrast, flood-related losses came in significantly below recent averages, at $3.4 billion compared to a five-year average of $15.4 billion.
Balz Grollimund, head of catastrophe perils at Swiss Re, said the relatively lower losses recorded in 2025 should not be mistaken for a reduction in underlying risk.
He explained that the figures were largely the result of favourable conditions rather than any structural improvement, warning that a return to normal loss patterns would likely push claims back toward the $148 billion mark in 2026. In more extreme scenarios, he added, insured losses could escalate significantly, reflecting the growing concentration of assets in high-risk areas.
Swiss Re’s analysis shows that the upward trend in losses is being driven primarily by increasing exposure, as population growth, urban expansion, and rising asset values continue to place more economic activity in harm’s way. The firm estimates that exposure growth alone accounts for more than 80 percent of the long-term increase in weather-related insured losses globally since 1970.
However, the report also highlights emerging evidence that other factors are becoming increasingly important. In some regions, changes in climate patterns and evolving vulnerabilities are accelerating loss growth beyond what exposure alone can explain.
In North America, for instance, wildfire risks are intensifying, with insured losses from such events growing at an annual rate of around 14 percent. This is partly attributed to longer fire seasons and shifting temperature and precipitation patterns. Meanwhile, severe convective storms remain a major driver of losses across both North America and Europe, where they are expanding at a pace that suggests additional underlying risk factors beyond simple asset growth.
Across Asia, flood events continue to dominate the secondary-peril landscape, while in Oceania and Australia, losses are more evenly distributed between storms and flooding, with a smaller contribution from wildfires.
Despite the increasing scale of losses, tropical cyclones remain the single largest contributor to overall long-term catastrophe losses. However, Swiss Re noted that severe convective storms have become the most significant driver of historical loss growth, accounting for approximately 38 percent of the increase, followed by wildfires and floods.
Urs Baertschi, chief executive officer for property and casualty reinsurance at Swiss Re, warned that a peak-loss year could more than double recent annual loss levels and exceed $300 billion.
He emphasised that while such extreme scenarios may not occur every year, they represent a critical risk for the industry, particularly given the increasing frequency and severity of certain types of natural disasters. He added that insurance and reinsurance play a central role in absorbing these shocks, helping to stabilise economies when low-frequency but high-impact events occur.
Beyond insured losses, the broader economic cost of natural disasters remains significantly higher. Swiss Re estimated total global economic losses at $220 billion in 2025, of which only 49 percent were insured. While this represents the highest level of insurance coverage on record, it also highlights the persistence of substantial protection gaps, particularly in emerging markets.
In many developing economies, the report noted, between 80 and 90 percent of catastrophe-related losses remain uninsured, exposing households, businesses, and governments to significant financial strain when disasters occur.
Jérôme Jean Haegeli, group chief economist at Swiss Re, said the long-term rise in losses is closely tied to the increasing concentration of valuable assets in risk-prone areas, as well as higher reconstruction costs.
He added that, in some regions, the pace of change in hazard intensity and vulnerability is beginning to outstrip traditional risk models, making it more difficult to maintain affordable and sustainable insurance coverage.
The report stressed that strengthening resilience through better risk awareness, improved infrastructure, and targeted mitigation measures will be essential in managing future losses. Without such efforts, insurers may face growing pressure on pricing, capacity, and long-term insurability.
