The value of uninsured natural-catastrophe losses rose more than 7% globally last year to $424 billion, with North America the most exposed region, according to a fresh analysis.
While insurance coverage has broadly kept pace with rising catastrophe exposure, the protection gap — in absolute terms — has gone up as the value of exposed assets has grown, the Swiss Re Institute said on Wednesday.
The cost of natural catastrophes such as hurricanes and wildfires has continued to rise in recent years, as a combination of climate change, urbanization and inflation mean disasters are getting more costly when they hit. In North America, the gap between insured and uninsured property rose 6% last year to $140 billion, compared with an 11% increase to $90 billion across Europe, the Middle East and Africa.
“In absolute terms, the protection gap continues to grow, as there is simply more to protect,” Swiss Re Institute said in the report.
At the same time, insurance coverage is going down in some highly hazardous areas. In California, for example, just 12% of residential property policies included earthquake coverage in 2024, down from 30% in 1994, the report found.
In emerging markets, resilience to natural catastrophes has declined over the decade, which means these regions are currently accumulating risk as insurance coverage declines, according to the report.
Meanwhile in Europe, adaptation measures may have helped limit the increase in insured flood losses over the past decade, according to the report. More broadly, insurance coverage improved in advanced economies in Europe, the Middle East, Africa and Asia Pacific since 2015, it said.
At the current pace, insured losses have the potential to hit $186 billion globally by 2030, compared with $107 billion in 2025, according to the report. That compares with an historical norm of less than $100 billion annually.
Photograph: Damage from Hurricane Melissa, in Black River, Jamaica; photo credit: Ricardo Makyn/AFP/Getty Images
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