Severe Convective Storms Surpass Tropical Cyclones as Costliest Insured Peril
Event summary
- Severe convective storms (SCS) surpassed tropical cyclones as the costliest insured peril of the 21st century, driven by high-frequency, high-severity outbreaks in the U.S.
- Global economic losses from natural disasters reached $260 billion in 2025, with insured losses at $127 billion, marking the sixth consecutive year that insurance payouts exceeded the $100 billion threshold.
- Wildfires in California (Palisades and Eaton Fires) were the costliest events of the year, causing $58 billion in economic losses and $41 billion in insured losses.
- Global fatalities totaled 42,000, driven primarily by earthquakes and heatwaves, with the Myanmar earthquake claiming 5,456 lives.
The big picture
Aon's 2026 Climate and Catastrophe Insight report highlights the growing need for collaboration among organizations, insurers, governments, and communities to manage volatility and unlock insurability. The report underscores the critical importance of both physical and financial resilience in the face of increasingly frequent and severe natural disasters. The insurance industry is positioned to act as a strategic partner, bringing record levels of capital to help clients respond to weather risks and build diverse alternative risk transfer solutions.
What we're watching
- Risk Management Strategies
- How organizations will embed adaptation into workforce and location strategies to mitigate risk and strengthen resilience.
- Insurance Industry Dynamics
- Whether the insurance industry can sustain record levels of capital deployment to help clients respond to weather risks.
- Regulatory and Infrastructure Developments
- The pace at which smarter technology, resilient building standards, and modernized infrastructure will be adopted to reduce long-term damage.
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