In the forecast: higher average natural catastrophe losses

Natural disasters have become more commonplace and severe amid a warming global climate, leaving organizations (and their CFOs) to find new ways of mitigating the associated risks.

That said, it’s about as surprising as sunshine in a Southern California forecast that Verisk bumped up its estimate on average annual insured natural-catastrophic losses to $171 billion, a $19 billion (or 12%) increase from its 2025 estimate. The US accounts for the majority ($117 billion, or 68%) of Verisk’s estimate.

The total figure ($117 billion) represents “the number the [insurance] industry must be prepared to withstand on average,” the insurance data and technology company noted in its 2026 Global Modeled Catastrophe Losses Report.

It is also “not determined by the outcome of one hurricane season or one year of catastrophe losses,” Jay Guin, chief research officer of Verisk’s catastrophe and risk solutions team, said in a news release. “It reflects a wide distribution of potential events across perils and regions, using current exposure data and a view of hazard grounded in the near-present climate.”

Severe thunderstorms made up the largest share of the firm’s modeled average losses, at 40%, followed by hurricanes at 27% and earthquakes at 10%.

Zoom out. Last year was fairly mild, actually, when it came to storm damages. The same was true the first six months of 2026.

For example, Verisk noted that natural catastrophes caused more than $100 billion globally in insured losses last year, well below the $134 billion 10-year average. Even so, the year exceeded $100 billion in losses despite no hurricanes making landfall in the continental US. Instead, the destruction came from “the costliest wildfires ever recorded” and severe thunderstorms that averaged $771 million in losses per event.

Swiss Re noted in an August report that the first half of 2026 racked up an estimated $42 billion in insured natural catastrophe losses, which was “well below the long-term trend.”

“A quieter first half of 2026…with natural catastrophe losses is certainly welcome news, but it doesn’t reflect the underlying trends,” Balz Grollimund, Swiss Re’s head of catastrophe perils, said in a video accompanying the report.

And it’s not just the climate crisis ballooning annual natural catastrophe losses. Verisk also cited drivers such as the increasing cost to rebuild and higher concentrations of people and buildings “in hazard-prone areas.”