Key Takeaways:
Global insured natural catastrophe losses fell to $42 billion in the first half of 2026, the lowest first-half total since 2020, Swiss Re Institute said.
"A less costly first half of the year does not mean the risk has gone away," Balz Grollimund, head of catastrophe perils at Swiss Re, said. "One major hurricane, earthquake or wildfire can quickly change the picture."
The total was down from $91 billion a year earlier and 16% below the 10-year average of $50 billion. Severe convective storms, mainly in the US, generated $28 billion in insured losses, the largest contributor, while economic losses from natural catastrophes reached $100 billion. Insurance covered about 42% of that damage, above the 30-year average of 33%, reflecting losses concentrated in highly insured markets.
The quieter first half does not signal lower risk. The second half historically accounts for 58% of annual insured nat cat losses, driven by North Atlantic hurricanes, and Swiss Re Institute estimates structural drivers — growing exposure in hazard-prone areas, rising reconstruction costs and changing hazard patterns — could push long-term insured loss growth of 5-7% annually.
The most destructive event of the half was the Venezuela earthquake sequence of June 24, which killed more than 5,000 people and caused an estimated $20 billion in economic damage, the costliest natural catastrophe in Latin America since the 2010 Chile earthquake. A Mw7.2 foreshock was followed less than a minute later by a Mw7.5 mainshock, the country's strongest since 1900. Low insurance penetration means only a small share of the damage is expected to be insured, a reminder of the protection gap across much of the developing world.
Severe convective storm activity across the US ran 20% above the 2016-2025 average through June, yet insured losses came in below trend because relatively few of the highest-impact outbreaks struck Texas, the Southern Plains and the Southeast, where insured asset concentrations are highest. The result shows insured losses depend on where storms land as much as their intensity.
Swiss Re Institute flagged wildfire as the fastest-growing weather peril globally, with insured wildfire losses in Europe rising an estimated 8-11% a year in real terms since 1970. Europe, the world's fastest-warming continent, now experiences 64% more hot days — days reaching 30°C or above — than in the 1950s. Record June heat and persistent dry conditions brought an earlier start to the fire season, with major fires affecting France and Spain in July.
The second-half outlook is shaped by a strengthening El Niño, which typically suppresses North Atlantic hurricane activity but does not eliminate landfall risk — 22% of US hurricane landfalls since 1950 occurred during El Niño conditions. El Niño can also redirect tropical cyclone activity toward the Central and East Pacific and alter flood and wildfire patterns elsewhere.
For reinsurers, the benign first half has eased near-term pressure on loss ratios — Swiss Re's own P&C reinsurance unit used less than 15% of its $836 million catastrophe budget in the first half, posting a combined ratio of 76.7%. But the structural trajectory points to sustained upward pressure on catastrophe losses, and the peak Atlantic hurricane season, which runs through September, remains the key test for the full-year result.
This article is for informational purposes only and does not constitute investment advice.
