Los Angeles Fires Made Up Half of a $80 Billion First Half for Insured Catastrophe Losses

Global insured losses from natural catastrophes reached an estimated $80 billion in the first half of 2025, according to the Swiss Re Institute, the second-highest first-half total on record. The figure was published on 6 August. The January wildfires in Los Angeles County, the Palisades and Eaton fires, caused about $40 billion in insured losses, according to Swiss Re, half of the global first-half total. Swiss Re's earlier sigma report, published in April, estimated that insured losses had been growing at 5% to 7% a year in real terms and that, if the trend held, full-year 2025 losses would approach $145 billion.

The second half of the year includes the peak of the North Atlantic hurricane season, which has historically produced the largest single-event losses. The fires spread through densely built, high-value neighbourhoods in Pacific Palisades and Altadena under extreme Santa Ana winds in January, outside the traditional fire season. Swiss Re has highlighted three factors that drive wildfire losses higher over time: growth in the number and value of properties in fire-prone areas, sometimes called the wildland-urban interface; rising construction and labour costs; and climate conditions that extend fire seasons and dry out vegetation.

Utilities are directly exposed to wildfire losses when their equipment is involved in an ignition. California's Wildfire Fund, created in 2019, can reimburse eligible utilities for claims above a threshold. For utility investors, wildfire liability has become one of the main credit risks for companies in the western United States. The $31 billion from severe thunderstorms in the first half continues a pattern in which these storms, which bring hail, tornadoes and damaging straight-line winds, produce large cumulative losses each year.

For energy infrastructure, hail is a major cause of damage to solar farms in Texas and other central states, and severe storms regularly cause distribution outages. One response by utilities to wildfire liability has been the public safety power shutoff, in which a utility de-energises lines in high-risk areas during extreme wind and dry conditions.