WTW Highlights Rising Natural Catastrophe Losses Exceeding $100 Billion Annually.

Willis Towers Watson's Natural Catastrophe Review highlights six consecutive years of insured losses exceeding $100 billion. The report emphasizes the importance of integrating climate forecasts into risk management strategies and offers insights on mitigating future risks. While the review provides valuable analysis, the persistent high losses pose a significant challenge for the insurance industry, necessitating reassessment of risk models and pricing strategies.

Title: Willis Towers Watson's Natural Catastrophe Review: Six Years of High Insured Losses

Willis Towers Watson's latest Natural Catastrophe Review reveals that insured losses from natural disasters have consistently exceeded $100 billion per year for the past six consecutive years. This trend underscores the significant challenges faced by the global insurance industry, which must reassess its risk models and pricing strategies to mitigate future risks. The report, published on July 29, 2025, highlights the importance of integrating climate forecasts into risk management strategies.

The review emphasizes the need for insurers to consider the underlying factors that contribute to major catastrophes. For instance, the devastating Los Angeles wildfires, which resulted in more than 18,000 homes and buildings destroyed and 29 fatalities, were exacerbated by severe drought conditions. Similarly, the worst wildfires in Japan and South Korea in at least a generation have been attributed to longer, hotter fire seasons and expanded urban development [1].

The review also notes that severe convective storms (SCS) in the United States have become a major concern, with insured losses in the first half of 2025 ranking as the second- or third-most active year on record for damaging winds and tornadoes. The combination of explosive growth in exposure and more favorable environments for storm genesis has raised SCS losses to be roughly equal to losses from hurricane damage over the same time frame [1].

The report highlights the importance of preparing for future risks, including the potential for tropical cyclones to push farther south due to climate change. For example, Cyclone Alfred made a southerly landfall near Brisbane and the Gold Coast, causing an estimated AUD $2.6 billion in insured losses. This event underscores the need for insurers to be prepared for similar events happening more often in the future [1].

The review also provides insights into the potential for higher losses from hurricanes in the North Atlantic and the Pacific Ocean. The latest forecasts expect 2025 to deliver another stormy season, with between 7 and 9 hurricanes (and either 3 or 4 major hurricanes) expected to form before the end of November. However, the ability to predict landfall rates or location remains limited, highlighting the need for caution in predicting the overall character of the upcoming hurricane season [1].

The report concludes by emphasizing the importance of adopting a broad geographic perspective to risk assessments and understanding how local geology can amplify the effects of remote earthquakes. The Mw 7.7 earthquake that struck Myanmar on March 28, 2025, caused the deaths of more than 5,000 people and triggered strong shaking in Bangkok, Thailand, more than 1,000 kilometers from the epicenter [1].

In summary, Willis Towers Watson's Natural Catastrophe Review provides valuable insights into the risks posed by major perils and the need for insurers to reassess their risk models and pricing strategies. The persistent high losses pose a significant challenge for the insurance industry, necessitating a proactive approach to risk management and preparedness.

References:
1. [Willis Towers Watson Natural Catastrophe Review](https://www.wtwco.com/en-us/insights/2025/07/willis-natural-catastrophe-review-january-to-june-2025)
2. [Willis Predicts Natural Catastrophes Will Not Offer Insurers Any Respite](https://www.nasdaq.com/press-release/willis-predicts-natural-catastrophes-will-not-offer-insurers-any-respite-2025-2025-07)