Gallagher Re's 2024 Report: Rising Catastrophe Losses and Insurance Trends

Gallagher Re's Natural Catastrophe and Climate Report 2024 provides an analysis of the most significant natural catastrophe events of 2024, their economic impact, and the broader implications for the insurance industry. According to the report, the estimated total direct economic cost of global natural perils in 2024 reached $417 billion, with $154 billion covered by the private insurance market and public insurance entities. 

Per Gallagher Re, the increasing frequency and severity of natural catastrophe events are shaping a "new normal" for insured losses, with annual average losses from 2017 to 2024 now approaching $150 billion. The report emphasizes the need to understand the interplay between climate change, peril-specific loss drivers, and socioeconomic factors that contribute to rising catastrophe costs. 

According to Gallagher Re, 2024 was the warmest year on record, as confirmed by global weather agencies. The lingering effects of a strong El Niño early in the year contributed to extreme weather patterns, which later transitioned into La Niña-like conditions. The economic cost of weather and climate-related events alone was estimated at $402 billion, accounting for 96 percent of total natural catastrophe losses. Severe convective storms were particularly impactful, resulting in $64 billion in insured losses, the highest of any single peril. 

Gallagher Re said that there were at least 60 individual billion-dollar economic loss events in 2024, with 30 of these also resulting in billion-dollar insured losses. The costliest insured events included Hurricane Helene and Hurricane Milton, each generating $20 billion in insured losses. Other significant events included the China Seasonal Floods, which resulted in $31 billion in economic losses but only $0.9 billion in insured losses, highlighting a significant protection gap. Additionally, Typhoon Yagi impacted several Asian countries, causing $17 billion in total losses with only $1 billion insured. 

Per the report, the insurance industry's response to these challenges is increasingly influenced by regulatory oversight and the growing role of climate risk management. Global regulators are leveraging global circulation models to implement and refine climate stress test scenarios, helping financial stakeholders better assess long-term risk exposures. The report highlights that insurers are adapting to this evolving landscape by integrating advanced catastrophe modeling, stress testing frameworks, and climate-focused underwriting strategies. 

According to Gallagher Re, while 2024 was not a record-setting year for total loss costs, the continued trend of elevated catastrophe-related losses underscores the need for insurers, governments, and businesses to invest in adaptive risk mitigation strategies. The growing financial strain on both traditional and nontraditional insurance markets further underscores the importance of public-private partnerships, parametric solutions, and innovative risk transfer mechanisms. 

Per Gallagher Re, the regional impacts of natural catastrophes varied significantly in 2024. The United States accounted for 76 percent of global insured losses, with severe convective storms driving a substantial portion of claims. In contrast, Asia and Europe saw losses below historical averages, while Canada and the United Arab Emirates experienced their costliest years on record due to catastrophic flooding and severe storms. The Eastern Spain October "depresión aislada en niveles altos" (isolated high-level depression) (DANA) event alone resulted in $12 billion in economic losses, of which $3.7 billion was insured. 

According to the report, the protection gap—the portion of losses not covered by insurance—remains a significant challenge. In 2024, this gap stood at 63 percent, translating to $263 billion in uninsured losses. The report stresses the need for expanded climate financing, enhanced disaster preparedness, and increased insurance penetration, particularly in emerging markets.