Severe convective storms (SCS) have surpassed tropical cyclones to become the costliest insured peril of the 21st century, according to Aon plc.
Total economic losses reached $260 billion — 23% below the 21st-century average and the lowest since 2015, said Aon’s 2026 Climate and Catastrophe Insight report. (Economic losses include insured loss claims).
“Yet beneath this quieter surface, the year told a very different story,” Aon cautioned. “Insured losses reached $127 billion, 27% above the long-term average, a reminder that even in a below-average hazard year, the concentration and severity of certain events can reshape the global loss picture.”
In comments accompanying the report, Aon said this divergence shows how high‑severity frequency-peril events — particularly in the U.S. — drive substantial insurance claims.
“While insured losses declined slightly from 2024, the long-term trend is clear: Weather exposures are rising,” commented Aon CEO Greg Case, in a forward to the report.
Indeed, 2025 marked the sixth consecutive year that insurance payouts exceeded $100 billion.
In contrast to the active first half, losses from catastrophe activity were subdued during the third quarter of the year and were about 25% below average in the fourth quarter, Aon added. “The lack of hurricane landfalls in the U.S. and a general pause in Atlantic storm activity during the climatological peak of the season were among the crucial factors.”
The global insurance protection gap narrowed to 51%, the lowest on record, Aon said, noting that this improvement was largely due to the concentration of losses in the U.S., which had 81% of global insured losses as a result of the market’s high insurance penetration. (The protection gap is the difference between economic losses from a natural disaster and the amount covered by insurance).