Total insured losses from catastrophe events in the first half of 2025 could reach as high as $90 billion, which would make it the second-highest first half on record, according to an estimate from analysts at Jefferies.
Jefferies’ $90 billion estimate is also well above the five-year average of $55 billion, underscoring the significant impact of natural catastrophe events so far this year.
As readers will recall, 2025 began with a particularly heavy first quarter, driven by two major wildfires in Los Angeles County in January that destroyed over 16,000 structures and burned more than 30,000 acres. These events caused approximately $30 billion to $40 billion in insured losses, estimates suggest, which ultimately drove Q1’25 to become the costliest opening quarter since 2011.
A recent updated estimate from insurance and reinsurance broker Aon put Q1 2025 insured catastrophe losses at least at $60 billion which it said was the second highest total for the period ever, with the US driving 94% of global Q1 loss activity this year.
In contrast, the second quarter of 2025 was relatively quieter in terms of catastrophe activity. While Jefferies initially anticipated a lighter quarter for cat losses, analysts now estimate global insured catastrophe losses in Q2 to be in line with the five-year average of $30 billion, with approximately 85% of losses stemming from the U.S.
“Domestic natural catastrophe losses were mostly driven by severe convective storms with peak SCS losses typically occurring in 2Q. Wind/tornado/ hail even counts were up slightly YoY, and ~20% above the 5-year average,” analysts explained.
Adding: “The mid-May SCS outbreak across the Ohio River Valley was among the most costly events in the quarter with estimated insured losses of $5bn, per Aon. We expect lighter nat CAT losses for reinsurers in 2Q25 with primary carriers being most impacted given the type of events.”
Primary insurers Progressive and Allstate disclosed that their combined quarter-to-date (QTD) catastrophe losses are down approximately 30% year over year, although still about 5% above the five-year average.
Jefferies analysts noted that while reinsurers may see reduced impacts in Q2 2025, primary carriers like Progressive and Allstate remain more exposed to these types of events.
Moreover, international nat cat losses in Q2 2025 were roughly in line with the five-year average of $3 billion. Notable events included severe convective storms in early May across Spain, France, and Southeast Europe, which could result in insured losses in the hundreds of millions.
Additional storms in early June across Western and Central Europe, as well as mid-June events in Western France and Northern Italy, could also contribute losses in the same range.
Meanwhile, insured losses from Hurricane Erick are expected to remain well below those of 2023’s Hurricane Otis, which resulted in $2 billion in insured losses.
Turning over to man-made losses, several key events in Q2 2025 are also expected to affect the re/insurance industry.
In mid-June, the UK High Court ruled that an aircraft lost in Russia was permanently lost due to war-related circumstances, making aviation war insurers liable for recoveries.
Among Jefferies’ coverage, Fidelis Insurance Holdings is the most impacted from the ruling, with analysts stating that they expect to see charges from this event in Q2’25.
Additionally, the Air India plane crash on June 12 is expected to result in insured losses of up to $500 million, according to Bloomberg, including $100 million for hull and engine, and up to $400 million for liability.
Analysts also noted that the sinking of the Morning Midas in early June could generate insured losses of around $100 million, while the fire at the Marathon Texas City Refinery on June 14 is estimated to result in business interruption losses in the hundreds of millions.
