Climate change is no longer a distant threat—it’s an economic reality. In the first half of 2025 alone, natural disasters such as wildfires, storms, and earthquakes inflicted an estimated $131 billion in global economic losses, according to a new report released by Munich Re, the German reinsurance giant.
Of the total $131 billion in damages, approximately $80 billion was insured—making it the second-highest insured loss for a first half-year since Munich Re began tracking such data in 1980. The only higher figure was recorded in H1 2011, primarily due to the devastating earthquake and tsunami in Japan.
The report signals a sharp increase in both climate-driven risks and the financial burden on the global insurance industry.
The most destructive disaster in the first half of 2025 was a wildfire outbreak in the Greater Los Angeles area in January. The event resulted in $53 billion in total damages, including $40 billion in insured losses.
This wildfire has become the most costly ever recorded, nearly doubling the damage of the previous record set in 2018—both in total and insured values.
According to Munich Re:
88% of total losses were caused by weather-related events such as hurricanes, floods, droughts, and wildfires.
98% of those weather-related losses were insured, highlighting the heavy reliance on the insurance sector to absorb climate-related shocks.
Earthquakes accounted for the remaining 12%, with only 2% covered by insurance.
Tobias Grimm, Senior Climate Scientist at Munich Re, emphasized:
“The message is clear—global temperatures are rising, oceans are heating up, and climate change is intensifying the frequency and severity of extreme weather events.”
Thomas Blunck, a member of Munich Re’s board of management, added:
“Climate change is real and it is transforming life on Earth. Events like the Los Angeles wildfires are becoming more likely, and they are teaching us all a vital lesson: adaptation is no longer optional—it’s essential.”
The rising frequency and scale of natural disasters are pushing the global economy and insurance sector toward a critical inflection point. The financial toll is becoming increasingly visible, reinforcing the urgent need for climate adaptation, risk management, and cross-sectoral cooperation.
As the world continues to warm, policymakers, insurers, and businesses must pivot from reactive to proactive climate strategies—not only to protect assets, but to ensure long-term resilience and economic stability.
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