Climate catastrophes are creating a ‘new market reality’ for insurance carriers
Raging wildfires and severe storms contributed to record-high global insurance losses — totaling an estimated $84 billion — for the first six months of the year, according to a report.
Beachside homes were destroyed in the Palisades Fire along Pacific Coast Highway on January 16. US wildfires in January accounted for about $40 billion of the $84 billion total, according to Gallagher Re's report. (Photo credit: Mario Tama/Getty Images via CNN Newsource)
(CNN) — Raging wildfires and severe storms contributed to record-high global insurance losses — totaling an estimated $84 billion — for the first six months of the year, according to a report from reinsurance broker Gallagher Re.
It has been the costliest first six months of a year since 2011, when insurance losses totaled $136 billion, the report said. Weather- and climate-related events amounted to at least $81 billion in the first half of 2025, the costliest on record for such events from January to June in a given year.
Insurance losses are expected to surpass $100 billion for the entire year, Gallagher Re estimated. The report called this “a new market reality.”
US wildfires in January accounted for about $40 billion of the $84 billion total.
The January wildfires that raged across Southern California were among the costliest and most destructive in Los Angeles County’s history. It forced tens of thousands of Californians to decide whether they would rebuild their homes or relocate from a state increasingly facing the risk of wildfires.
In February, State Farm General, which is California’s largest insurance provider, said it received more than 8,700 claims and paid over $1 billion to customers in the wake of the wildfires. Citing a “dire” financial situation, the company requested an emergency interim rate hike averaging 22% for homeowners from state officials, putting more pressure on California homeowners.
Severe storms that created damaging tornadoes, winds and hail in the United States accounted for at least $33 billion in losses, according to estimates from Gallagher Re.
The strongest storms hit the Midwest and South in mid-March, creating large tornadoes that raked through towns and hauled debris into the air. Gallagher Re estimated that the outbreak of storms between March 13 and March 16 totaled nearly $8 billion in insured losses.
That’s the fourth costliest storm outbreak for insurers on record, Gallagher Re reported.
The rest of the world, meanwhile, experienced below-average insurance losses.
Non-US insured losses were less than $10 billion, marking the second time since 2006 that the first half of a year fell short of $10 billion. The costliest non-US event of this year was April’s earthquake in Myanmar and Thailand, where losses could top $1 billion once all of the claims are processed.
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