Summary
Reinsurer Swiss Re expects insured losses from natural catastrophes to climb to about $148 billion in 2026, according to estimates published on March 19. In a severe scenario, losses could surge to as much as $320 billion. The long-term average for insured losses forms the basis for Swiss Re's projection. The firm warned that the below-trend catastrophe losses seen in 2025 were due to favourable variability rather than a reduction in underlying risk. Rising global temperatures are increasing the frequency and severity of hurricanes, floods, wildfires and other disasters, leading to higher claims and pushing insurance premiums upward.
For homeowners and businesses, this means disaster preparedness and adequate insurance coverage are more important than ever. Higher premiums could strain household budgets, but being underinsured could be catastrophic if extreme weather hits. Financial advisers suggest reviewing policies to ensure coverage for floods, windstorms and wildfires, and setting up emergency savings to cover deductibles and repairs. Investors may also watch insurance stocks and catastrophe bonds, as higher claim costs could affect profitability. Swiss Re's forecast underscores that climate risk is a financial risk. As losses climb, insurers may raise rates or limit coverage in high-risk areas, affecting mortgage affordability and local economies. Taking steps now to mitigate risks—such as strengthening buildings, following evacuation guidelines and considering resilient investments—can help reduce the financial impact of natural disasters.