Lower Q2’25 cat losses lighten re/insurance industry burden after heavy Q1: J.P. Morgan

Following a very active start to the year, the second quarter of 2025 appears to have been significantly quieter in terms of large natural catastrophe losses for the global re/insurance industry, according to a new report from J.P. Morgan.

In January, Los Angeles County faced two major wildfires that destroyed over 16,000 structures and burned more than 30,000 acres. The event caused approximately $40 billion in insured losses, which drove Q1’25 to be the costliest opening quarter since 2011.

However, Q2 2025 provided some welcome respite for the industry, with a notably benign loss environment.

J.P. Morgan estimates that total insured catastrophe claims in Q2 2025 are likely to come in slightly above $10 billion, which is well below the recent average of around $20 billion.

“There were no natural catastrophes in the quarter that we would regard as typical reinsurance events, with 2Q 25 losses dominated by Severe Convective Storms in the US and to a lesser extent in Europe,” analysts explained.

Adding: “We see this backdrop as likely driving a better-than-expected catastrophe loss experience for the European reinsurers and Lloyd’s names in Q2.”

As mentioned, Q2’25 was active in terms of SCS, particularly in the U.S., with some additional, smaller losses recorded in Europe.

J.P. Morgan estimates that U.S. SCS events could result in losses exceeding $10 billion, while European events are expected to cost insurers hundreds of millions of dollars, according to broker Aon.

“This brings the total losses in 1H 2025 to ~$65bn, including ~$53-$56bn losses in 1Q 2025. On average, insured losses during the first half of the year have been ~$50bn over the last decade, implying that losses in 1H 2025 have exceeded the average,” analysts explained.

In addition to natural catastrophes, analysts also noted that the tragic crash of an Air India flight last month could result in insurance claims of up to $500 million.

Further supporting the lower catastrophe burden in Q2’25, monthly disclosures from U.S. primary insurers showed reduced activity, with both Allstate and Progressive reporting lower cat losses in April and May compared to the same months in 2023 and 2024.