2025 Natural Catastrophe losses should not lull market into false sense of security, warns Willis

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[{"type":"text","content":"LONDON, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Natural catastrophes caused more than US$100 billion in insured losses in 2025, the sixth consecutive year above that threshold, yet a decrease of $40 billion when compared with 2024. The level of losses recorded, without a single hurricane making landfall in the United States, highlights the continued severity and persistence of natural catastrophe risk. The latest edition of the Natural Catastrophe Review published today by Willis, a WTW business (NASDAQ: WTW), with contributions from Willis Re, delves into the underlying trends, structural pressures, warning signs and systemic vulnerabilities behind climate risk. Key takeaways include: Wildfire must be considered a core contributor to the volatility of insurance portfolios: pricing cannot rely exclusively on historical losses. Wildfiremodels must be adjusted to present-day conditions, use detailed asset level characteristics to supplement exposure data and apply realistic estimates for replacement costs. Prolonged drought enhanced by global warming and the continuing encroachment of communities into the wildland-urban interface has long been predicted to make catastrophic fires much more likely, but 2025 proved how severe claims can get. Case study: Eaton and Palisades Fires, United States Risk modelling has to consider compound perils: cumulative damage brought on by multiple perils in quick succession (such as earthquakes on rain saturated soil, or typhoons following seismic events) can often lead to delayed claims payments and disagreements with policy holders. Disaster risk financing products can be tailored to reduce the economic impact of a sequence of catastrophic events when they happen. Case study: Super Typhoon Ragasa, Philippines Warming North Atlantic is changing hurricane behaviour: 2025 was the first year in a decade where no hurricanes made landfall in the US, but other places were not so fortunate. The review analyses why the Caribbean may see more Category 5 storms and for a longer season. It was previously uncommon for major hurricanes to form in October, but as the North Atlantic has warmed, the environmental conditions that are favourable to hurricane formation are lasting later in the year. That same warming also allows storms to become much stronger very quickly. Case study: Hurricane Melissa, Jamaica Flood risk ...

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