Aon has published its annual Climate and Catastrophe Insight report, revealing that severe convective storms (SCS) have surpassed tropical cyclones to become the 21st century’s costliest insured natural disaster category.
The report shows how increasingly common, high–volume events are reshaping global loss patterns and highlights the critical importance of both physical and financial resilience to help organizations manage volatility and unlock insurability.
Global economic losses from natural disasters reached $260 billion in 2025 — the lowest since 2015 — yet insured losses remained elevated at $127 billion, marking the sixth consecutive year that insurance payouts exceeded the $100 billion threshold. This divergence reflects how concentrated, high–severity frequency peril events — particularly in the United States — continue to drive substantial insured loss even in below–average hazard years. In many regions, especially emerging markets, more than half of economic losses remained uninsured, leaving millions exposed to financial risk.
Other key findings from the report include:
- In 2025 alone, SCS generated $61 billion in insured losses globally, the third–highest SCS total on record.
- Insurers covered nearly half of global economic losses in 2025, leaving a protection gap of 51%, the lowest on record. This was a result of concentrated high-impact events in the US.
- 49 billion–dollar economic–loss events occurred in 2025 (above the long–term average of 46), while 30 billion–dollar insured–loss events far exceeded the historical average of 17 — underscoring the accumulation effect of increasingly frequent, medium–sized catastrophes.
- Wildfires in California (Palisades and Eaton Fires) were the costliest events of the year, causing $58 billion in economic losses and $41 billion in insured losses, making them the most expensive wildfires ever recorded globally.
- Global fatalities totalled 42,000 driven primarily by earthquakes and heatwaves — 45 percent below the 21st–century average. The Myanmar earthquake was the deadliest event apart from heatwaves, claiming 5,456 lives.
- Extreme heat caused more than 25,000 deaths globally and remained a major driver of natural disaster related mortality, as 2025 ranked as the third–hottest year on record.
The report calls for increased resilience via better forecasting, resilient building standards, and modernized infrastructure to reduce long-term damage and assist communities and businesses to recover faster.
“Resilience today must be both physical and financial,” said Michal Lorinc, head of Aon’s catastrophe insight and author of the report. “Organizations are urged to embed adaptation into their workforce and location strategies, invest in predictive analytics and encourage cross-functional approaches to weather risk. As climate events continue to affect people and property, the opportunity lies in using data to strengthen preparedness, rethink risk management strategies and build partnerships that support faster recovery and long-term resilience.”
