The private and public insurance markets were hit with £125bn of losses last year due to natural catastrophes and severe weather, according to reinsurance broker Gallagher Re, which adds that such annual nat cat losses could become the new normal.

In its latest natural catastrophe and climate report, the firm said: “In 2024, the estimated total direct economic costs from global natural perils were £337bn. The private insurance market and public insurance entities covered £125bn of that total. The annual average loss from natural catastrophes from 2017 to 2024 has cost insurers £118bn. This suggests a ‘new normal’ approaching £121bn per year.”

The report adds that the severity and frequency of natural catastrophe events continue to rise, impacting both traditional and non-traditional insurance markets worldwide. Steve Bowen, chief science officer at Gallagher Re, said: “With each year, we continue to witness an increase in the severity and high-impact frequency of natural catastrophe events in expected, and increasingly unexpected, parts of the world. While the (re)insurance industry remains in a strong position to withstand these higher aggregated loss costs, we face a new growing reality.

“The complex challenges arising from these events is accelerating the need to better identify how physical and non-physical risk profiles are evolving. We must also recognise the various way these risks are increasingly linked together.”

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