High U.S. Catastrophe Losses Result in Lowest 1H Insurance Protection Gap: Aon Report

 Aon plc (NYSE: AON), a leading global professional services firm, published its Global Catastrophe Recap: First Half 2025 report, which cites a preliminary estimate of at least $162 billion in economic losses from global natural disasters during the first half (1H) of 2025. This figure was above the 21st-century 1H average of $141 billion and comparable to the economic losses recorded in 1H 2024 ($156 billion).

Published by Aon’s Catastrophe Insight team, the report reveals that 1H economic losses were driven by the Palisades and Eaton wildfires in California, the Myanmar earthquake and multiple severe convective storm (SCS) outbreaks across the U.S. According to preliminary estimates, 1H economic losses in the U.S. alone reached at least $126 billion, surpassing 1994 ($115 billion) as the costliest 1H on record and significantly above the 1H average since 2000 ($41 billion). In contrast, economic losses in all other regions remained below their long-term 1H averages.

Meanwhile, global insured losses for 1H 2025 were at least $100 billion (1H 2024: $71 billion) – above the 21^st century 1H average of $41 billion, and the second-highest total on record after 1H 2011, where $140 billion of losses occurred. More than 90 percent of the global insured losses occurred in the U.S., primarily driven by wildfires and SCS.

The difference between insured and economic losses resulted in a global insurance ‘protection gap’ of 38 percent – the lowest 1H value on record and significantly lower than the 21st-century average of 69 percent. This was due to the dominant contribution of events in the U.S., where insurance penetration stands relatively high. Comparatively, insurance coverage for the Myanmar earthquake was less than $100 million compared to the total economic damage of $12 billion.  

The report highlights that at least 19 events, 18 of which occurred in the U.S., surpassed $1 billion in insured losses in 1H 2025. Outside the U.S., the European SCS outbreak in late June was the only event that exceeded this threshold. Cyclone Alfred in Australia resulted in the insured losses of approximately $900 million (AUD 1.4 billion), followed by Windstorm Éowyn in Ireland and the UK, which caused $690 million (€620 million) in insured loss.

At least 7,700 people were killed due to natural disasters during 1H 2025 – well below the 21st-century average of 37,250 – with the majority of deaths (5,456) resulting from the Myanmar earthquake.

Andy Marcell, CEO of Global Solutions at Aon, said: "Across Risk Capital and Human Capital, our teams continue to identify ways to not just transfer risk, but better analyse and mitigate risk in order to help countries and clients become more resilient. This approach is typified by our Impact Forecasting catastrophe modelling suite, which now spans 12 perils and 90 territories.”

While tropical cyclone activity was relatively subdued across the Atlantic basin in 1H 2025, above-average tropical cyclone activity is still anticipated across most seasonal forecasts for the full 2025 North Atlantic hurricane season, which ends in November.

About Aon

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