Climate disasters are set to cost $145 billion in insured losses globally in 2025 a sharp 6% rise from last year making it one of the costliest years on record, according to a new report by reinsurance giant Swiss Re.
This projected figure surpasses the $137 billion loss in 2024 and is well above the historical average. The rise is driven by a growing number of extreme weather events which experts link to climate change, urban expansion, and increasing populations in high-risk zones.
A major driver of this year’s spike is the wildfires in Los Angeles which alone are expected to cause $40 billion in insured damages, the report said.
Total Damage Far Worse
While insured losses are skyrocketing, the total losses from natural disasters including damages not covered by insurance hit a staggering $318 billion in 2024. That’s up from $292 billion in 2023, continuing a dangerous upward trend.
These figures reflect not just more frequent disasters, but also the growing cost of recovery. From hurricanes and floods to storms and fires, every region is feeling the heat.
What’s Driving the Costs?
Swiss Re highlights three key reasons for the rising disaster costs:
- Climate change is intensifying weather events like storms, wildfires, and floods.
- Urban sprawl is placing more homes and infrastructure in vulnerable zones.
- Economic and population growth are raising the value of assets at risk.
“These losses aren’t just numbers, they’re homes, livelihoods, and lives disrupted. And many of them are preventable,” Swiss Re said in its statement.
Why It Matters
Rising disaster costs also point to a widening protection gap, the portion of damage that goes uninsured. As climate events grow stronger, this gap leaves more people exposed, especially in low-income and developing areas.
Analysts say stronger policies are needed to support disaster-resilient infrastructure, promote climate-smart planning, and expand insurance coverage in high-risk zones.