Moody’s: LA Wildfires, US Catastrophes Drove Bulk of Global Insured Losses in 2025

The devastating Los Angeles wildfires in 2025 and U.S. insured catastrophe losses of more than $45 billion for the third consecutive year helped push global economic losses from catastrophes to $224 billion, a report from Moody’s shows.

In a year with no U.S. hurricane landfalls, catastrophe losses were driven by secondary perils. Wildfires and severe convective storms now account for the bulk of insured losses, redefining the risk profiles of insurers, according to Moody’s.

“So-called ‘secondary’ perils—including wildfires and severe convective storms —dominated the insured loss landscape in 2025, underscoring the view that these non-peak ‘secondary’ perils should not be classed as secondary at all, as losses continue to mount,” the Moody’s report states.

Related: Severe Convective Storms Become Costliest Insured Peril of 21st Century: Aon

Severe convective storms produced $45 billion in U.S. losses that include a March outbreak that caused between $8 billion and $10 billion in damages across 26 states. Moody’s blamed urban sprawl, rising repair costs, and social inflation for amplifying severe convective storm losses, bolstering evidence that these storms are now a primary insurance risk.

With market estimates from Munich Re and Swiss Re showing insured losses were around $108 billion and $107 billion, the total for 2025 was 25% lower than the record insured losses of 2024. However, this is the sixth consecutive year that insured losses have surpassed $100 billion, according to Moody’s.

According to the report, the U.S accounted for more than 80% of the total global insured losses, driven primarily by the L.A. wildfires and severe convective storm outbreaks throughout the first half of the year.

“Tornado activity was particularly notable, especially in the first half of the year, with more than 1,500 reports, including the first EF-5 tornado in the U.S. in 12 years,” the report states.

Moody’s estimates the L.A. wildfires generated $20 billion to $30 billion in insured losses.

Los Angeles wildfires destroyed more than 18,000 structures, caused 30 fatalities, and burned 37,728 acres, with smoke damage emerging as a major driver of uninsured and underinsured loss.

Related: California Bill Requires Insurers to Offer, Renew Coverage for ‘Fire-Safe’ Homes

The impact on the insurance from the wildfires hit an already stricken California homeowners insurance market. The blazes followed the non-renewal of more than 1 million wildfire policies in recent years, increased reliance on the California FAIR Plan statewide and by 52% in L.A. County alone between 2024 and 2025, according to Moody’s. The wildfires that kicked off 2025 not only sped up a statewide homeowners insurance market pullback, they also played a part in an ongoing reshaping of California’s surplus lines market.

“The two largest wildfires, the Palisades and Eaton Fires, were the second- and third-most damaging wildfires in California’s history, respectively, with 30 fatalities and over 18,000 structures destroyed,” the report states.

Top photo: 2025 Pacific Palisades Fire: Source: CalFire.