Insurance Market Overview

2025 once again underscored the persistent volatility of natural catastrophe risk. Global insured losses from natural catastrophes are projected to exceed USD 100 billion for the sixth consecutive year, even in the absence of a single dominant, large-scale event. While the Los Angeles wildfires and multiple severe convective storms were significant drivers, impactful events across several regions also added meaningfully to the global total.   The fact that such elevated losses occur without a major hurricane making landfall in the US highlights how rapidly the risk landscape is evolving. Secondary perils are now consistently among the main contributors to annual loss burdens.   As we reflect on this year’s experience, it is clear that the industry must be prepared for a broader spectrum of impactful events to safeguard communities and build resilience.   🔗 Read more about our full year nat cat estimates here: https://lnkd.in/eJjADufV

Heat. Air Quality. Insurance Costs. An Indian Reality We Must Confront. Reflecting on a recent article I read around on how global heatwaves, air pollution, extreme weather are no longer distant threats. They’re having real, measurable impacts on homes, health, and financial risk. As an insurance broker, I believe it’s our duty to understand these changes, and help India stay resilient. Here’s what our sector should be really be thinking about:   What’s Changing, and Why It Matters 1. Rising temperatures and worsening air quality are more than environmental issues, they lead to greater health risks (respiratory, cardiovascular), increased mortality, and greater stress on medical systems. 2. Homes in many Indian cities are more exposed: ageing infrastructure, poor insulation or ventilation, and limited cooling systems magnify heat stress. 3. As insurers factoring in more frequent claims for heat damage, pollution-related losses, and weather disasters, premiums go up. That may make cover harder to access for many.   What the Insurance Industry Must Do 1. Embed Climate & Health Risk into Underwriting We need granular data: mapping risk zones for heat, pollution, flood etc., and using that to price fairly. Homes in “hot-spots” may need additional risk mitigation built into policies. 2. Design Products that Pay for Prevention Develop solutions that reward preventive measures, from cool roofing and air filtration to safer construction practices, where it is best to avoid the use of hazardous materials like asbestos. Parametric/trigger-based covers can also play a role, activating when thresholds such as heat index or AQI are breached. 3. Educate and Partner with Clients Many customers are unaware of how indoor heat or local air quality can damage property, health, and finances. Brokers must become educators, helping people assess risk, explore mitigation, reduce exposure. 4.Collaborate with Regulators & Local Governments Building codes, city planning, heat-mitigation infrastructure, pollution control, these are public goods that reduce risk for everyone. Working together can help reduce insurance risk, keep costs manageable, and make adaptation scalable. Why This Is a Leadership Opportunity India is uniquely placed. We have diverse climates, rapid urbanisation, and growing awareness. By acting now: Build trust: clients will value brokers who anticipate change, offer stable, forward-looking solutions. Drive innovation: those who develop climate-resilient products will lead, not lag, as regulation and customer expectations evolve. The realities of climate change are here and so are opportunities: to protect, to innovate, to lead. Insurance isn’t just about recovering losses, it’s about building resilience and enabling safer, healthier lives. #ClimateRisk #IndiaResilience #HealthAndClimate #RiskManagement https://lnkd.in/dYrveZd3 

Post #3 | Are Secondary Perils Still Secondary? We still call them secondary perils: hail, wildfire, inland flood, convective storms. But across the market, it’s becoming clear: They’re not secondary anymore. Not in impact. Not in volatility. Not in complexity. This year we’ve seen: 🔥Western wildfires reshaping pricing and appetite 🌪️ Severe convective storms driving multi billion $ losses across multiple states 🌧️ Repeated inland flooding exposing data and modeling gaps The challenge? ->Loss patterns are increasingly erratic & historical averages aren’t holding up. ->Underwriters often lack credible, location-specific data to segment these risks confidently. ->Capacity calls are still influenced by perception, not just modeled outputs. There’s also a terminology problem. Calling them “secondary” downplays their strategic importance, and that mindset shows up in pricing, portfolio choices, and where teams spend time. At DHA-1, Inc, we’re seeing more carriers and MGAs revisit how they capture, clean, and use peril-specific data because the portfolio impact is no longer marginal. How are you treating these risks, still secondary, or center stage? #DHA1 #PropertyInsurance #Insurtech #SecondaryPerils #CatastropheModeling #UnderwritingTrends #RiskManagement #Flood #Wildfire #ConvectiveStorm

2025: A year of hail storms, fire and high water. Secondary perils dominated natural catastrophe losses in 2025, accounting for a record 92% of insured losses and continuing a decades-long trend of rising baseline risk. Despite a quieter hurricane year, the underlying trajectory remains unchanged, with losses expected to keep growing and potentially rebound sharply in the years ahead. Key facts & figures: *92% of the USD 107bn insured losses in 2025 came from secondary perils – the highest share on record. *5–7% annual growth in insured losses remains intact driven mainly by expanding exposure and rising costs. *Losses could rebound sharply to USD 148bn in a trend year or up to USD 320bn in a peak year, underscoring that 2025 was a temporary dip, not a change in risk trajectory. In 2025, secondary perils drove 92% of the USD 107 billion in insured natural catastrophe losses, the highest share on record. This included the #wildfires that destroyed Los Angeles neighborhoods, but also severe convective #storms in North America and #flooding across much of Asia. In fact, secondary perils have been the fastest-growing segment of insured losses for more than half a century and are raising the loss baseline. While 2025's losses came in below the USD 140 billion implied by the long-term growth trend – largely because no hurricane made landfall in the United States – one quieter year does not alter the direction of travel of risk. Over the long term, Swiss Re Institute (SRI) data shows that the trend of global insured natural catastrophe losses rising on average by 5-7% annually in real terms is intact. Expanding exposure due to urbanisation and economic growth accounts for most of this increase. Increasing insurance penetration is marginally contributing to loss growth as more damage is covered (this is a good outcome), while rising prices also play a role in lifting post-catastrophe replacement costs. For some perils in certain regions, insured loss growth is outpacing the expansion in exposure and the impact of increasing insurance coverage. This residual loss growth beyond exposure reflects the combined effects of hazard intensification, which is linked to the frequency, intensity and spatial distribution of weather-related events, and heightened vulnerability, stemming from the susceptibility of exposed assets to damage as well as development in high-risk areas without adequate mitigation. If past experience is a guide, the dip in insured losses in 2025 is not a signal of lower risk. If the long-term loss trend resumes, it implies that insured losses could reach USD 148 billion this year. Should a peak-year scenario unfold, the 2026 insured loss could climb as high as USD 320 billion. Access the full report on our sigma explorer portal: https://lnkd.in/eBMABMjC

👉 Global insured losses from natural catastrophes were USD 137 billion in 2024. Economic losses from disaster events in 2024 were USD 318 billion, of which 57% were uninsured which left a still large global protection gap of USD 181 billion. ✋ Key findings from Swiss Re report on natural catastrophe trends: 1️⃣ Projected Insured Losses: In 2025, insured losses from natural catastrophes are expected to reach $145 billion, marking a nearly 6% increase from 2024 and positioning it among the costliest years on record. 2️⃣ Major Loss Contributors: The Los Angeles wildfires alone are estimated to account for $40 billion in insured damages, significantly impacting the overall loss figures. 3️⃣ Total Economic Losses: Including uninsured damages, total losses from natural catastrophes in 2024 amounted to $318 billion, up from $292 billion in 2023, and substantially above historical averages. 4️⃣ Underlying Risk Factors: Continuous economic and population growth, urban sprawl into vulnerable areas, and the effects of climate change are driving the upward trend in disaster-related losses. 5️⃣ Long-Term Loss Trends: Over the past 30 years, insured losses from natural catastrophes have grown at an average annual rate of 5.9% in real terms, outpacing global GDP growth of 2.7%. 6️⃣ Secondary Perils on the Rise: Severe convective storms (SCS), including hailstorms, have become the second-largest loss-making peril after tropical cyclones, driven by urbanization and economic growth. 7️⃣ Protection Gap: In 2023, 62% of total catastrophe losses were uninsured, highlighting a significant protection gap and the need for increased insurance coverage and risk mitigation efforts. 8️⃣ Industry Adaptation: The insurance and reinsurance industry must adapt to the increasing risk landscape by expanding capacity, enhancing risk assessment models, and investing in mitigation and adaptation measures to strengthen societal resilience. 👉 Read the full report for interesting stats and visualisations

The insurance industry has a built-in tension that shapes the experience you get that most people have no idea exists. And it’s not because there are bad people in it. It’s because the model quietly pulls people in the wrong direction. Here’s the part most business leaders never see: In many brokerage firms, the same people responsible for advising clients are also responsible for generating new business. That means their time and attention are constantly being pulled in two directions. Serving the clients they already have… And pursuing the next opportunity. This is simply how the model is built. Now think about renewal season. It’s the busiest time of year. It’s when you need guidance, clarity, and focus the most. And it’s also when many advisors are trying to close new business before the year ends. That creates a quiet conflict. Do I spend time deepening strategy with current clients… Or do I go chase the next one? Most leaders never see this tension, but they feel it. And it shapes the experience they have with their broker. Years ago we realized something important. If we truly wanted to put clients first, the model itself had to change. So we devised the roles in a unique way. We redirected the time and energy that risk advisors would normally spend chasing new business back into serving the clients we already had. And we rebuilt our process around year-round proactive risk management. It sounds simple. But it’s not the norm in insurance. That shift allowed us to deliver what the industry often promises but rarely sustains: consistent, proactive, client-first guidance. This isn’t just an insurance conversation. Incentives drive behavior. Behavior drives outcomes. The question isn’t whether your advisor is a good person. The question is whether the model they operate in actually allows them to fully serve you. That’s where the real difference lives.

More heat causes more destructive weather. Already, climate change has made it so that what used to be called secondary perils -- floods, serious thunderstorms, and wildfires -- are now a permanent primary loss driver for the insurance industry. This transition explains how the US accounted for more than 80% of global insured losses in 2025 even though no major hurricanes made landfall. What to do? • Stop emitting greenhouse gases ASAP. This will slow the temperature rise as much as possible as soon as possible • Invest in loss prevention. Loss prevention is key because the earth will continue to warm and severe weather will continue to get worse until greenhouse gas emissions are zero. Every dollar invested in loss prevention measures can save up to $10 in losses. https://lnkd.in/gJusTEDZ #ClimateChange #ExtremeWeather #Insurance #LossPrevention

Looking for a breakdown of the US P&C insurance market? If so, you’ve come to the right place. This article saves you hours of research by bringing together the most important insights from earnings calls, financial statements, and industry reports. The industry’s full-year 2024 combined ratio was 96.9%. The big themes were catastrophic losses, casualty lines severity, and expense pressures. Severe weather drove billions in insured losses. Hurricane Helene, the California wildfires, and Midwest flooding hit insurers hard. The Francis Scott Key Bridge collapse became the largest marine insurance loss in history. Social inflation pushed casualty lines severity higher, driven by rising jury awards and increased attorney involvement. Many insurers reported favorable prior-year reserve development, while others strengthened reserves in response to elevated casualty lines severity. Technology investment ramped up as AI, cloud platforms, and automation became critical for efficiency and cost control. Major personal lines insurers were profitable, with results driven by rate actions, expense discipline, and improved underlying loss experience. Commercial insurers maintained profitability through targeted renewal pricing, risk selection, and policy restructuring. Casualty reinsurance markets tightened, making coverage harder to secure. Specialty insurers found opportunities in admitted market dislocations and favorable pricing conditions. Retention strategies became a priority as companies worked to balance rate actions with keeping policyholders. Capitalization remained strong, with insurers growing book value and returning capital to shareholders. Reduced capacity in catastrophe-prone areas is making coverage unavailable, and in some cases, prices are making insurance unaffordable. If this trend continues, more risks will shift to government-backed programs, residual markets, and self-insurance, creating broader economic concerns. Balancing society’s need for coverage with publicly traded insurers' accountability for shareholder returns remains one of the industry's biggest challenges. If you work in P&C insurance, what’s been top of mind for you lately? Full article here. ⬇️ #actuarialscience #riskmanagement #insurance #careers #themaverickactuary

In a new Executive Insight report developed by Moody's Casualty Insurance Solutions in collaboration with Aon's Reinsurance Solutions, we identify an estimated $5 billion per annum growth opportunity in the coming casualty cat market. With mass litigation cases shifting the casualty market from episodic losses to systemic, portfolio-wide events, our report discusses how a structured, data-driven casualty cat market is forming fast. We look forward to discussing this opportunity with clients and contacts at Rendez-Vous de Septembre (RVS) #RVS2025 in Monte Carlo over the coming days, showing how emerging risks are reshaping liability, the need for AI-enabled casualty cat models, exposure-based pricing, and latency reserving to turn uncertainty into actionable insight, and the role of named-peril structures in bringing coverage certainty and managing accumulations. Download the Executive Insight report: https://lnkd.in/g6uaHESS Read Aon's press release: https://lnkd.in/dz5KvkKv #insurance #reinsurance #casualty #emergingrisk #PFAS #microplastics  #riskmanagement

In my years, starting from ICICI Lombard to leading APD Insurance Brokers, I’ve often been told to leave empathy out of business. I never could, and honestly, I wouldn’t want to. Motherhood taught me early on that managing risk isn’t just about spreadsheets and rules. When my child falls and scrapes a knee, my first instinct isn’t to calculate the cost of the bandage. It’s to calm and guide. That same instinct drives how I approach risk advisory. It’s anticipating the unexpected, preparing for every scenario, and having a plan B (and C) ready before anyone even asks. Empathy isn’t an emotional add-on to risk management. It is part of the risk management framework itself. Think about it: • A sudden fire halts operations at a warehouse. • A family faces an unexpected health emergency. • A business owner stares at documents they barely understand. In those moments, they are not looking for a “broker.” They’re looking for someone who can translate fear into a plan. That’s where empathy quietly becomes strategy, in subtle, practical ways: • Listening without interruption, even at odd hours of the day. • Reassuring them that they are there for guidance at every step. • Giving them clarity before paperwork. • Keeping steady even when the situation feels anything but that. Empathy doesn’t replace expertise. It strengthens it. In the long run, that’s what builds trust. It’s the most resilient risk management tool any organisation can have. #RiskManagement #EmpathyInBusiness #Leadership #Trust #InsuranceBroker