Insured losses from natural catastrophes in North America fell 23% to $90 billion in 2025, but the decline does not signal a reduction in underlying risk, Swiss Re Institute said Wednesday.
Underlying insured losses continue to rise due to structural factors such as population growth and increasing asset values in high-risk areas, Swiss Re said.
North America recorded $90 billion in insured losses in 2025, down from $117 billion a year earlier and below the five-year average of $97 billion, the report said.
Secondary perils dominated losses, with wildfires and severe convective storms generating about $40 billion and $46 billion in insured losses, respectively, as the absence of a major U.S. hurricane landfall left them as the primary drivers of losses.
The costliest events were the Palisades and Eaton wildfires in Los Angeles County, which generated about $40 billion in insured losses, the largest wildfire loss event on record, Swiss Re said.
Severe convective storm losses made 2025 the third-costliest year on record for the peril and extended a run of elevated losses, the report said.
Wildfire risk in particular is increasing as development expands into the wildland-urban interface, where built-up areas meet natural vegetation, heightening exposure and ignition risk.
Since 1970, insured wildfire losses have grown about twice as fast as exposure, with about 60% of the increase attributed to changes in underlying risk factors rather than economic growth alone, Swiss Re said.
Adaptation and mitigation measures, including stronger building standards, are critical to reducing loss potential and maintaining insurability in high-risk regions, the report said.
