Disastrous weather events inflict substantial destruction across the globe during the initial six months of 2025
In the first half of 2025, the world witnessed an unprecedented surge in insured losses from natural disasters, with a total of approximately $80 billion. This figure, nearly double the 10-year average, marks the second-highest first-half insured loss historically, trailing only behind the disasters of 2011.
The key drivers of these high insured losses were extreme weather events exacerbated by climate change, large wildfire and storm damage, particularly in the United States, and rising insurance coverage exposure. Weather-related events accounted for 88% of total damages and 98% of insured losses.
The most costly natural disaster in the first half of 2025 was the wildfires in the Los Angeles metropolitan area. These wildfires, which occurred during a usually rainy winter season following a long drought, caused total damages estimated at $53 billion, with approximately $40 billion insured. The damages from these wildfires were nearly double the worldwide damages in 2018, previously considered the most expensive year for wildfires.
The wildfires in the Los Angeles area contributed significantly to the total damages of around $131 billion, which were incurred due to natural disasters worldwide. The earthquake in Myanmar, with estimated economic damages of about $12 billion, was another devastating natural disaster in the first half of 2025. The earthquake is estimated to have killed 4,500 people and caused total damages of around $131 billion.
Earthquakes accounted for 12% of total damages and 2% of insured losses in the first half of 2025. The magnitude 7.7 earthquake on March 28 in Myanmar was the second most costly catastrophe of the first half.
According to Thomas Blunck of Munich Re, catastrophes like those in Los Angeles have become more likely due to global warming. He suggests that the best way to avoid damages as much as possible is through prevention, such as more resilient building methods. He also emphasised climate change as a key underlying cause of the increased severity and frequency of natural disasters, making disasters like the California wildfires more likely and destructive.
In conclusion, the first half of 2025 saw a significant increase in insured losses from natural disasters, driven by extreme weather events, large wildfire and storm damage, especially in the US, and rising insurance coverage exposure. The record-level insured loss figure was second only to 2011’s severe disasters.
The significant increase in insured losses from natural disasters in the first half of 2025 can be attributed to extreme weather events worsened by climate change, as suggested by Thomas Blunck of Munich Re. Furthermore, the surge in insured losses underscores the importance of environmental science in understanding and preventing costly natural disasters, particularly in relation to finance.
