Willis predicts natural catastrophes will not offer insurers any respite in 2025

Rhea-AI Summary

Willis (NASDAQ: WTW) has released its biannual Natural Catastrophe Review, predicting continued strain on global insurance markets in 2025. The report highlights that insured losses from natural catastrophes have consistently exceeded USD 100 billion annually for six consecutive years.

The Los Angeles wildfires of January 2025 have already caused estimated insured losses of USD 40 billion, marking it as the costliest wildfire event in history. Other significant 2025 events include major wildfires in Japan and South Korea, record-breaking tornado activity in the US, and unprecedented weather events in Australia and Ireland.

With global temperature targets likely to be missed, Willis emphasizes the critical need for risk managers to adapt strategies and build resilience against climate extremes. The company forecasts an above-average North Atlantic hurricane season, suggesting 2025 could be among the costliest years for insurers.

Positive

• Comprehensive data-driven analysis and forecasting capabilities demonstrated through the Natural Catastrophe Review
• Strong market positioning in climate risk assessment and catastrophe analytics

Negative

• Continued high natural catastrophe losses exceeding USD 100 billion annually pose significant industry challenges
• Los Angeles wildfires already consumed USD 40 billion in insured losses for 2025
• Global temperature targets likely to be missed, indicating increased future catastrophe risks

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LONDON, July 29, 2025 (GLOBE NEWSWIRE) -- Natural catastrophes continue to put a strain on global insurance markets, according to the latest Natural Catastrophe Review published today by Willis, a WTW business (NASDAQ: WTW).

Worldwide, insured losses from natural catastrophes now consistently exceed USD 100 billion per year. It’s been six years since the insurance industry last experienced a year with low losses from natural catastrophes. Events so far in 2025 indicate that losses exceeding USD 100 billion will very likely continue for at least another year.

The Willis Natural Catastrophe Review is a biannual publication that provides insights into recent natural catastrophes and shares expert views on the risks posed by major perils. It sets out the causes and effects of major catastrophes in 2025 to date and goes beyond the headlines to identify the underlying factors that made them possible. The Review also provides an expert outlook for the rest of the year and into 2026, exploring potential threats from hurricanes, drought, flood and other hazards.

Other key trends to note:

• Exceptional natural catastrophes: So far, major events in 2025 include the Los Angeles wildfires (globally, the worst wildfire event ever with respect to insured losses), the worst wildfires in Japan and South Korea in at least a generation, the third-most active year on record for tornadoes in the United States, the first landfalling cyclone near Brisbane, Australia in 50 years, and the highest wind speed ever recorded over Ireland.
  
  
• Natural catastrophes under climate change: The severity and scale of recent catastrophes underlines the need to confront a new era of climate extremes. Risk managers must reassess the risk, integrate climate forecasts into their plans, and ensure insurance and risk frameworks are optimized for today’s evolving threats. Data-driven strategies are needed to narrow protection gaps and to stay resilient in a rapidly changing world.
  
  
• Leveraging scientific advances to mitigate future risks: The Review presents a forward view on natural catastrophe risk for the remainder of 2025 and early 2026. It also provides concrete advice on how to make the most of seasonal weather forecasts and identifies geographic regions that may be exposed to elevated catastrophe risk during the next three to six months.
  

Peter Carter, Head of Climate Practice, Willis, said: “2024 continued a 6-year streak of natural catastrophe losses in excess of USD 100 billion.  The wildfires in Los Angeles early in 2025 will drive estimated losses of USD 40 billion alone so the streak looks set to continue. With global efforts likely failing to keep the temperature below 2°C above pre-industrial levels, our focus must now turn to adapting and building resilience in the face of this new reality.”

Cameron Rye, Director, Natural Catastrophe Analytics, Willis said: “The Los Angeles wildfires of January 2025 resulted in insured losses more than USD $40 billion, equivalent to nearly one-third of global insured losses the previous year. The scale and timing of the event placed immediate pressure on insurers’ catastrophe loss budgets at the beginning of the year and prompted a renewed focus on how wildfire risk is modelled, particularly in high-exposure areas like the urban-wildland interface. With an above-average number of storms predicted for the North Atlantic hurricane season, 2025 is shaping up to be one of the costliest years on record for (re)insurers.”

The full Natural Catastrophe Review can be accessed here.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

Media Contacts

Lauren David
Lauren.David@wtwco.com
+44 7385947619

FAQ

What are Willis's (WTW) predictions for natural catastrophe losses in 2025?

Willis predicts insured losses will likely exceed USD 100 billion in 2025, continuing a six-year streak, with the Los Angeles wildfires already causing USD 40 billion in losses.

How much did the Los Angeles wildfires of 2025 cost insurers according to Willis (WTW)?

According to Willis, the Los Angeles wildfires of January 2025 resulted in insured losses of USD 40 billion, equivalent to nearly one-third of global insured losses from the previous year.

What major natural catastrophes has Willis (WTW) identified in 2025?

Willis identified several major events including the Los Angeles wildfires, severe wildfires in Japan and South Korea, the third-most active US tornado year, the first Brisbane cyclone in 50 years, and record wind speeds in Ireland.

What is Willis's (WTW) outlook for the North Atlantic hurricane season in 2025?

Willis forecasts an above-average number of storms for the North Atlantic hurricane season, contributing to 2025 potentially being one of the costliest years on record for insurers.

How is climate change affecting insurance markets according to Willis (WTW)?

According to Willis, climate change is creating a new era of extremes, requiring risk managers to reassess risks, integrate climate forecasts, and optimize insurance frameworks to address evolving threats.