Catastrophes leave a financial burden, with 60% of damages remaining unreimbursed
In 2024, the world faced one of the costliest years on record for insured losses from natural disasters, with a staggering $145 billion in damages. This figure, as highlighted in the 2025 Aon Climate and Catastrophe Insight report, marks at least the seventh consecutive year with losses at or above this level.
The report, a global leader in insurance and reinsurance intermediation and risk management consulting, revealed that insured losses from natural catastrophes in 2024 exceeded $100 billion. The first half of 2025 alone saw insured losses of around $80 billion—the second-highest half-year total on record—while total overall economic losses reached approximately $131 billion in the same period.
The increase in economic losses from natural disasters is a global trend, with the most severe and frequent climate-related disasters causing significant damage. In 2024, for instance, the hottest year on record, economic losses amounted to $368 billion. Events like the Los Angeles wildfires, the most expensive wildfire in history with over $40 billion in insured losses, and severe wildfires in Japan and South Korea demonstrate the intensified climate extremes. Weather disasters such as hurricanes, cyclones, and tornados have also contributed significantly, causing 88% of overall losses and 98% of insured losses worldwide.
The pattern of high natural catastrophe losses, with 2024 representing a 54% increase from the century's average, is a concern for many experts. From 2019 through 2024, natural catastrophe losses remained above $100 billion annually, with 2025 projected to continue this trajectory. This trend signifies a “new era of climate extremes,” driven by climate change and inadequate mitigation of rising temperatures.
Geographically, the United States accounted for the largest share of losses in H1 2025, largely due to the Los Angeles wildfires. Europe, Japan, South Korea, Australia, and Ireland also experienced significant catastrophe events, though Europe’s losses in early 2025 were below previous-year levels.
Experts emphasise the urgent need for a shift from just mitigation to adapting infrastructure, updating risk models (especially for wildfire risk in urban-wildland interfaces), and building resilience into insurance and risk management frameworks. With current global efforts unlikely to keep warming below 2°C above pre-industrial levels, this adaptation becomes increasingly important.
In Italy, economic damages in 2024 were below the average of recent years. However, some flooding events in Italy, such as those in September and October in Emilia-Romagna, generated significant economic losses. The average insurance penetration for earthquake and flood risks for residential properties and small businesses in Italy is a low 6%, indicating a significant protection gap.
The need for interaction between the public and private sectors to increase the resilience of society in Italy is highlighted. As the country is a high-risk country for both climate and seismic activity, addressing this gap and improving resilience is crucial for the future.
[1] Aon Climate and Catastrophe Insight Report 2025 [2] Willis Re Annual Global Catastrophe Review 2025 [3] Munich Re NatCat Service 2025 [4] Swiss Re Sigma Study 2025
- The 2025 Aon Climate and Catastrophe Insight report indicates that the insurance industry, as well as the field of environmental science, must take into account the financial implications of climate-change-induced natural disasters in their business strategies.
- The staggering economic losses from natural disasters in 2024, as pointed out in various reports including the Aon Climate and Catastrophe Insight Report 2025, the Willis Re Annual Global Catastrophe Review 2025, Munich Re NatCat Service 2025, and Swiss Re Sigma Study 2025, demonstrate the urgent need for investment in renewable energy and energy-efficient technologies to combat climate change.
- In the education and self-development sector, there is a growing emphasis on teaching and learning about climate change and its impact on the environment, as well as the economy and business, to equip future generations with the knowledge and skills to address this critical issue.
- As the losses from natural catastrophes have consistently surpassed the $100 billion mark since 2019, according to reports such as the Aon Climate and Catastrophe Insight Report 2025, the Willis Re Annual Global Catastrophe Review 2025, Munich Re NatCat Service 2025, and Swiss Re Sigma Study 2025, it is essential for those in the business and finance sectors to prioritize climate-change mitigation and adaptation measures in their investment strategies.
