SINGAPORE, January 29, 2026 – Natural catastrophes caused more than US$100 billion in insured losses in 2025, the sixth consecutive year above that threshold, yet a decrease of US$40 billion when compared with 2024. The level of losses recorded, without a single hurricane making landfall in the United States, highlights the continued severity and persistence of natural catastrophe risk.
The latest edition of the Natural Catastrophe Review 2026 published today by Willis, a WTW business (NASDAQ: WTW), with contributions from Willis Re, delves into the underlying trends, structural pressures, warning signs and systemic vulnerabilities behind climate risk.
Cameron Rye, Director of Natural Catastrophe Analytics at Willis Re said: “Good luck is no substitute for sound strategy. Even if 2025 can be described as a moderate loss year, catastrophe risk remains high, and physical risks continue to increase as the world warms. Insurers should act now to protect their portfolios against unsustainable accumulations of risk and prepare for a reversal of fortune. The path forward given these trends isn’t to walk away from risk, but instead to encourage investment in resilience and mitigation. Risk managers and sustainability teams can protect business value by working together, supported by advances in modelling, pricing and risk awareness.”
Key observations from the Review include:
Risk modelling has to consider compound perils: Cumulative damage brought on by multiple perils in quick succession (such as earthquakes on rain saturated soil, or typhoons following seismic events) can often lead to delayed claims payments and disagreements with policy holders. Disaster risk financing products can be tailored to reduce the economic impact of a sequence of catastrophic events when they happen.
In Southeast Asia, this phenomenon is increasingly evident. Events such as earthquakes occurring on rain‑soaked ground or typhoons following seismic activity can escalate losses, often complicating claims processes and creating friction between insurers and policyholders. These evolving risk patterns highlight the need for disaster risk financing solutions that apply a risk‑layered approach to help governments, businesses and insurers manage and mitigate the escalating financial impacts of consecutive catastrophic events.
The Philippines provides a clear example of this escalating challenge. In the latter half of 2025, the country endured Super Typhoon Ragasa, four major earthquakes and their aftershocks, followed by two additional landfalling typhoons, each compounding the damage left behind by earlier events. Such complex, multi‑hazard sequences not only strain emergency response capabilities but also increase the likelihood of delayed claims payments and operational disputes.
Dr Christopher Au, Head of the APAC Climate Risk Centre at Willis, said: “What makes the Philippines particularly vulnerable is not only the increasing frequency of multi‑hazard events, but also the persistent catastrophe protection gap. Insurance penetration remains low at currently less than 1%, leaving businesses and communities at risk.
“Risk layered disaster financing, combining public, private and parametric solutions is becoming essential to safeguarding long term resilience. They can help reduce volatility, support faster recovery and strengthen financial stability across Southeast Asia’s most disaster prone economies.”
Dr Christopher Au | Head of APAC Climate Risk Centre
“When disasters strike in rapid succession, the absence of sufficient financial protection amplifies economic disruption and slows recovery across businesses and local governments. This is precisely why risk‑layered disaster financing, combining public, private and parametric solutions is becoming essential to safeguarding long‑term resilience. They can help reduce volatility, support faster recovery and strengthen financial stability across Southeast Asia’s most disaster‑prone economies.”
Flood risk is also no longer confined to formally defined zones, and more intense rainfall than ever before is expected to accompany tropical storms: As the world continues to warm, both ends of the hydrological spectrum (flood and drought) are expected to become more intense. The second half of 2025 featured extreme or record-setting rainfall in many locations, leading to numerous cases of severe flooding in places not typically considered to be high risk.
Pluvial flooding, which occurs when intense rainfall overwhelms surface drainage and causes high water in places far removed from rivers, lakes or coasts, has become a risk to watch. Risk managers ought to think broadly about their exposure to all types of high water and adjust their insurance coverage accordingly.
“For businesses, governments and insurers, the economic implications are significant. Early indication suggests that the flooding across the Southeast Asia region may result in economic losses well above US$10 billion, compared with the US$1 billion to US$2 billion range typical of major regional flood events over the past decade. Warmer oceans, shifting formation zones and greater track sensitivity mean that past patterns are becoming less reliable guides to future risk. With this changing operating environment, the role of counterfactuals is becoming more central to risk management strategies to help understand possible impact from near misses and natural variability, and not just rely on past observations,” added Dr Au.
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