Global natural disaster losses in 2025 remained alarmingly high, totaling approximately $224 billion, despite a decrease from the previous year, Munich Re announced Tuesday. This figure underscores a growing vulnerability to climate-related risks, even as recovery efforts continue.
Insured losses reached $108 billion, marking another year where these surpass the $100 billion threshold – a troubling trend that raises questions about the long-term sustainability of insurance markets and the affordability of disaster recovery for vulnerable populations. While lower than the $368 billion in overall damage seen in 2024 (adjusted for inflation), the pattern reveals a concerning escalation in the frequency and severity of extreme weather events. Notably, 92% of overall damage derived from weather-related catastrophes, a figure that swelled to 97% for insured losses.
The human toll was also significant, with approximately 17,200 lives lost, exceeding the previous year’s figure but remaining below the ten-year and thirty-year averages. This highlights the inconsistent yet devastating impact of these events across different regions and the critical need for improved disaster preparedness and response systems.
The rising prevalence of “non-peak perils” – specifically floods, severe thunderstorms and wildfires – is emerging as a long-term trend. These events caused $166 billion in overall damage, with insured losses reaching $98 billion, far exceeding historical averages. The scientific consensus points to a direct link between the increasing intensity and frequency of these events and climate change in many regions.
Munich Re emphasized that the world narrowly averted potentially catastrophic losses in 2025, largely due to sheer luck – particularly the absence of hurricane landfall on mainland U.S. despite several powerful storms. Without this reprieve, the overall damage could have been considerably higher, potentially exceeding ten-year average levels of $266 billion. While insured losses roughly mirrored the ten-year average of $107 billion (inflation-adjusted), the 30-year averages, both for total and insured damages, were significantly surpassed, indicating a structural shift in disaster risk.
The proportion of uninsured losses, at around 50% of the total, was lower than the average of the previous ten years (approximately 60%). This reduction is largely attributable to the high insured penetration in wildfires near Los Angeles; without the inclusion of those losses, the insurance gap would have remained consistent with historical norms, exposing millions to financial ruin following a disaster.
The most costly single disaster of the year was the January wildfires in the Los Angeles area, causing an estimated $53 billion in total damage, with $40 billion insured. This represents the most expensive wildfire disaster recorded to date, claiming 30 lives. The 7.7 magnitude earthquake in Myanmar, while resulting in comparatively lower overall damage of $12 billion, was primarily a humanitarian crisis, contributing to the deaths of nearly 4,500 and underscoring the disproportionate impact disasters have on developing nations. Remarkably, seismic activity rippled across the region, causing damage even in Bangkok, a distance of approximately 1,000 km from the epicenter, a consequence of the city’s unstable soil conditions.
A defining characteristic of 2025’s natural disaster landscape was the clear link between numerous extreme events and the intensifying effects of climate change. Wildfires in Los Angeles, a higher proportion of intense hurricanes in the North Atlantic and widespread flooding are indicative of a system under stress.
“In a world in fever, extreme weather events are more probable” stated Tobias Grimm, Munich Re’s Chief Climate Scientist. “2025 was once again one of the hottest years on record” he added, highlighting the urgent need for accelerated climate mitigation and adaptation strategies to safeguard global communities and infrastructure. The continued increase in disaster losses necessitates a reassessment of long-term resilience strategies and the potential for systemic vulnerabilities in the global economy.
