Media: Los Angeles wildfires push 2025 insurance losses to record highs

The wildfires that ravaged Los Angeles in January are expected to drive this year’s total insured losses significantly above the historical industry average, according to reinsurer Munich Re.

Natural disasters worldwide have already resulted in $80 billion in insured losses during the first half of 2025, with fires in and around the LA area accounting for half of that sum, the company said in a report released on July 29, Caliber.Az reports per Bloomberg.

The level of insured losses from natural catastrophes in the first six months has not been seen since 2011, when a tsunami struck Japan and triggered the nuclear disaster at the Fukushima Daiichi plant. Looking ahead, Munich Re’s chief climate scientist Tobias Grimm warned that losses could increase further as the US hurricane season progresses.

“The second half of the year is usually more expensive than the first half due to the hurricane season in North America,” Grimm said by phone from Munich. He added that annual insured losses breaching $100 billion, once rare, are now the “new normal.”

The surge in natural disasters coincides with a rapid rise in global temperatures, with last year recorded as the hottest on record. In California, the January wildfires destroyed entire neighbourhoods, becoming among the most damaging in the state’s history.

“Climate change wasn’t the cause of the wildfires, but it did contribute to their devastating impact in LA,” Grimm said.

Severe storms, including tornado outbreaks across several US states from March to May, contributed $14.6 billion to insured losses in the first half, Munich Re noted. Europe also suffered significant damage, with intense thunderstorms in France, Austria, and Germany in June generating the region’s largest insured losses.

Grimm highlighted that growing risks linked to natural disasters are likely to drive increases in so-called risk-adequate premiums.

“Munich Re continues to have an appetite for insuring losses from natural catastrophes,” he said. “This is one of the areas in which we want to grow.”

By Aghakazim Guliyev