Core Insights - Natural catastrophes caused over US$100 billion in insured losses in 2025, marking the sixth consecutive year above this threshold, but a decrease of $40 billion compared to 2024, indicating persistent natural catastrophe risk despite no hurricanes making landfall in the US [1][2] Industry Trends - The Natural Catastrophe Review by Willis highlights the need for insurers to adopt sound strategies to manage high catastrophe risk, emphasizing investment in resilience and mitigation rather than avoiding risk [2] - Insured losses from natural catastrophes in 2025 were over $100 billion globally, indicating a higher risk floor for catastrophic perils [2] - The report discusses structural pressures and systemic vulnerabilities that exacerbated the impact of natural catastrophes in 2025, advising insurers to update their risk perspectives [2] Risk Modelling and Case Studies - Wildfire is identified as a core contributor to insurance portfolio volatility, necessitating adjustments in wildfire models to reflect current conditions and realistic replacement costs [3] - Risk modelling must account for compound perils, as cumulative damage from multiple perils can lead to delayed claims and disputes [3] - The warming North Atlantic is altering hurricane behavior, with implications for the Caribbean and the potential for more intense storms later in the season [3] - Flood risks are expanding beyond traditionally defined zones, with extreme rainfall leading to severe flooding in areas not typically considered high risk [3]

Core Insights - Natural catastrophes are significantly impacting global insurance markets, with insured losses consistently exceeding USD 100 billion annually for the past six years [2][3] Industry Trends - The Willis Natural Catastrophe Review highlights that 2025 is likely to continue the trend of losses exceeding USD 100 billion, driven by events such as the Los Angeles wildfires, which alone are estimated to cause losses of USD 40 billion [2][4] - The Review emphasizes the need for the insurance industry to adapt to increasing risks associated with climate change, as global efforts to limit temperature rise are failing [4][6] Major Events - Significant natural catastrophes in 2025 include the Los Angeles wildfires, the worst wildfires in Japan and South Korea in a generation, and an active tornado season in the United States [6] - The Review notes the first landfalling cyclone near Brisbane, Australia in 50 years and the highest wind speed recorded over Ireland, indicating a trend of increasing severity in natural disasters [6] Risk Management - The Review calls for risk managers to reassess their strategies in light of climate forecasts and to optimize insurance frameworks to address evolving threats [6] - It provides guidance on leveraging seasonal weather forecasts and identifies regions at elevated risk for natural catastrophes in the coming months [6]