Swiss Re Sigma: Secondary Perils Drive Record 92% of 2025's $107B Insured Losses; 2026 Projected at $148B

Swiss Re Institute's annual sigma report on natural catastrophe losses, published March 19, 2026, provides the insurance industry's most authoritative assessment of global catastrophe risk trends. The 2025 loss year tells a story of structural change: while total insured losses of $107 billion were below the $140 billion implied by long-term trend growth (due primarily to the absence of a major US hurricane landfall for the first time in ten years), the composition of losses was extraordinary.

Secondary perils — a category encompassing wildfires, severe convective storms (SCS), and floods — accounted for a record-high 92% of all insured natural catastrophe losses in 2025. This is a historically unprecedented share and marks a fundamental shift in how the industry must think about risk. Two decades ago, primary perils (major hurricanes and earthquakes) dominated catastrophe loss tallies. The steady rise of secondary perils reflects both physical changes in the frequency and intensity of events and the growing concentration of high-value assets in exposure-prone areas.

Wildfires stood out as the dominant loss driver. The January 2025 Palisades and Eaton wildfires in Los Angeles County produced combined insured losses of approximately $40 billion — the largest wildfire event ever recorded on Swiss Re's sigma records. These fires occurred as a direct result of a convergence of meteorological drivers (extended dry conditions, strong winds) with the expansion of high-value residential development into wildland-urban interface zones. Separately, insured losses from severe convective storms in 2025 were $51 billion — the third-costliest year on record for SCS after 2023 and 2024.

While 2025 was a below-trend year for total losses, Swiss Re's structural analysis is sobering. Since 1996, insured catastrophe losses have grown at an average annual rate of 5–7% in real terms — a trajectory that implies $148 billion in insured losses for 2026 under trend conditions. In a peak-loss scenario involving major US hurricane landfalls or earthquakes in high-penetration areas, 2026 losses could reach $320 billion, the reinsurer estimates. By 2030, a peak-loss year could generate approximately $400 billion in insured losses — more than double the last actual peak year (2017).

Wildfire is specifically identified as the fastest-growing natural peril, with insured losses growing at approximately 12% per year. The economic loss ratio for catastrophes was 49% in 2025 — meaning roughly half of all catastrophe economic damage was insured, the highest insured share ever recorded in sigma history, though still leaving a $113 billion global protection gap.