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Several additional insights help put the number into context:
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- The United States accounts for the majority of modeled insured catastrophe risk. Of the $171 billion global insured AAL, $117 billion (68 percent) is attributed to the U.S.
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- Severe thunderstorm accounts for 40 percent of modeled insured catastrophe risk, more than any other peril. It remains the largest contributor to Verisk’s global insured AAL, ahead of tropical cyclone (27 percent), earthquake (10 percent), winter storm (9 percent), flood (7 percent) and wildfire (6 percent). The pattern held in 2025, when frequency perils, rather than a single hurricane, drove industry losses.
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- A severe catastrophe year could generate losses nearly three times higher than the global insured AAL. The report also examines increasingly severe but plausible loss scenarios: At the 100-year return period – commonly used in the industry to describe a scenario with a 1 percent annual likelihood – modeled aggregate insured losses reach $477 billion. At the 250-year return period, losses reach $606 billion.
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Since Verisk first published this report in 2012, the estimated global insured AAL has nearly tripled, rising from $59 billion to $171 billion. The original 2012 figure was expressed in 2012 dollars. The change also reflects Verisk’s investment in expanding model coverage to more than 20 additional countries and regions, advances in science, data and modeling methods, updates to Verisk’s view of risk, and growth in insured exposure.
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What’s Driving Higher Losses Beyond the Hazard
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Catastrophe losses are shaped by more than the number or severity of storms, wildfires or earthquakes in a given year. Several long-term trends continue to increase the value of property at risk and the potential cost of future catastrophes:
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- There is more property to insure. Property exposure in the countries Verisk models has grown roughly 7 percent annually since 2021, driven by both new construction and rising asset values.
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- The cost of rebuilding keeps increasing. In the United States, residential reconstruction costs have risen about 5 percent annually since 2021, outpacing consumer inflation and increasing the potential cost of catastrophe losses even when hazard activity remains unchanged.
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- More people and property are concentrated in hazard-prone areas. Population growth continues to be concentrated in catastrophe-exposed regions, while development expands in flood plains, wildfire zones and other high-risk locations. In England, for example, 7.1 percent of single-family homes already sit in the 100-year flood plain, and one in nine new homes built between 2022 and 2024 was built in a flood-risk area — a share Verisk’s models project could rise to one in seven new homes by 2050.
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Together, these trends increase insured catastrophe losses independently of weather patterns and help explain why the industry’s risk benchmark continues to rise.
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What would that mean in practice? Verisk’s models show that adding a significant U.S. landfalling hurricane to a year like 2025 could push annual insured catastrophe losses to roughly $200 billion. Industry reports indicate that total insured losses for 2025 ranged from $107-$129 billion. The figure reflects an aggregate total across all perils in a single year, not a single mega-event. Verisk’s report treats that figure as a foreseeable scenario the industry should be prepared to withstand, not a tail risk to revisit only after it happens. For consumers, a year with increased significant natural catastrophe events could mean increased premiums, changes to underwriting terms, and in the hardest-hit areas, less available coverage in subsequent years.
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Why a quiet hurricane season is not a quiet year
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Verisk’s report underscores that a year without a U.S. landfalling hurricane can lull the market toward thinner pricing and looser underwriting terms, precisely when discipline matters most. Down years, the report notes, are when catastrophe models help insurers separate resilience from volatility when the market eventually turns.
English (US)