Losses due to natural disasters around the world have fallen sharply to reach $224 billion in 2025, reinsurer Munich Re announced on Tuesday, while warning of a still “alarming” picture of extreme weather events likely caused by climate change.
This figure is down almost 40% from the previous year, in part because no hurricane hit the American continent for the first time in several years.
Still, “the overall picture is alarming when it comes to floods, severe storms and wildfires in 2025,” said Munich Re, a Germany-based insurance provider to the insurance industry.
The costliest disaster of the year occurred in the form of the Los Angeles wildfires in January, with total losses of $53 billion and insured losses of around $40 billion, Munich Re said in its annual catastrophe report.
It is striking how many extreme events are likely to be influenced by climate change in 2025 and only by chance has the world been spared potentially greater losses, the group says.
“The planet is in a fever and as a result we are seeing a series of severe and intense weather events,” said Tobias Grimm, chief climatologist at Munich Re. AFP.
Last month, Swiss Re, another major player in the reinsurance sector, also reported a sharp decline for 2025, bringing total losses to $220 billion.
According to Munich Re’s report, insured losses for 2025 amounted to $108 billion, also down sharply from last year.
About 17,200 lives were lost to natural disasters worldwide, significantly higher than about 11,000 in 2024, but below the 10-year average of 17,800, the report said.
Grimm said 2025 was a year with “two faces.”
“The first half of the year was the costliest claims period the insurance industry has ever seen,” he said, but the second half saw the lowest losses in a decade.
Wildfires in Los Angeles and earthquake in Myanmar
It is now the cumulative costs of smaller disasters – such as local floods and wildfires – that have the greatest impact.
Losses from these events totaled $166 billion last year, according to Munich Re.
After the Los Angeles wildfires, the costliest disaster of the year was the devastating earthquake that struck Myanmar in March, which reportedly caused $12 billion in losses, only a small portion of which was insured.
Tropical cyclones caused approximately $37 billion in losses.
Jamaica was hit by Hurricane Melissa, one of the strongest hurricanes ever to hit, causing losses of approximately $9.8 billion.
By region, total U.S. losses were $118 billion, of which $88 billion was insured — roughly the same amount as the U.S. nonprofit Climate Central’s estimate of $115 billion in total losses.
The Asia-Pacific region saw losses of around $73 billion, but only $9 billion was insured, the report said.
Australia suffered its second costliest year in terms of overall natural disaster losses since 1980, driven by a series of severe storms and floods.
Europe recorded losses of $11 billion. Natural disasters in Africa resulted in losses of $3 billion, less than a fifth of which was insured.
The report comes at a time of growing skepticism about green policies, particularly since the return to power of US President Donald Trump, who has derided climate science as a “hoax”.
But Grimm warned that the Earth “continues to warm.”
“More heat means more humidity, heavier precipitation and higher wind speeds – climate change is already contributing to extreme weather,” he said.
