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Climate catastrophes like wildfires and severe storms have become more frequent and damaging in the U.S., accounting for 83% of the estimated global insured losses of $107 billion in 2025, according to a new report from Swiss Re Institute.
This is the sixth consecutive year that global insured losses have surpassed $100 billion.
The Los Angeles wildfires in January accounted for insured losses of $40 billion alone, making them the costliest-ever wildfires globally, according to Swiss Re.
The insurance research firm said the soaring costs are due in part to rising real estate values as well as homeowners building in areas where wildland and urban areas blend, which is especially hazardous.
"Amid annual volatility, insured losses keep rising. That's why strengthening prevention, protection and preparedness is essential to protect lives and property," said Swiss Re Group Chief Economist Jerome Jean Haegeli in a news release.
Insurers are increasingly requiring mitigation from their policy holders. In wildfire prone areas, that can mean felling trees and clearing vegetation to create a defense zone around homes and buildings. In areas that are vulnerable to hurricanes, resilience requires a real focus on building materials and methods.
FM, a mutual insurer for commercial, industrial properties, has a special research campus in Rhode Island where teams of engineers test and certify materials and systems designed to withstand all kinds of perils.
"We're an engineering company that does insurance," Malcolm Roberts, the CEO of FM, told CNBC in an interview. "We will not sell our insurance capacity without the engineering, and we will not sell our engineering without the insurance."
FM's engineers have developed large-scale tests to simulate things like a Category 2 hurricane, severe hailstorms, wildfires, earthquakes and even dust explosions.
FM employs nearly 2,000 engineers who work with each client to identify specific risks and then implement resilience solutions, such as improving the roof and wall materials or installing flood barriers.
"They can't stop the hurricane coming, but they can prevent the damage when it does," Roberts said.
A growing focus for the 190-year-old company is hail, which has become an increasingly expensive natural catastrophe. It's also the leading cause of damage to solar panels.
FM uses a high-powered "hail cannon" to test the resilience of roofing materials and solar panels to see what products can withstand the impact. FM issues certifications verifying which products meet the highest standards for property loss prevention.
"We understand the hail size that's prevalent in that area, test those photovoltaic panels for those hail sizes at the right impact, and then design a test standard," said FM Chief Science Officer Lou Gritzo.
"The bottom line for businesses is [if you] ask for an FM-approved roof, you get a roof that you know is going to withstand the storm for your wind zone," he said.
Investing in mitigation solutions can be pricey, but FM offers a resilience credit to help.
"[We] give 10% of the clients' premium back to them, to help them implement those solutions ... whether it's climate or fire or equipment risk," Roberts said.
"I'd rather our clients put that capital into risk mitigation than paying it to me in premium, because in the long run, the trade is going to work out very well for both," he added.
Insurer Hippo similarly offers its insurance customers advice on mitigation efforts like automatic or remote shutoffs for gas, water and appliances.
USAA actively reached out to 3 million members in 2025 to coach them in protecting their properties, the insurer said.
"Our members are participating in loss mitigation programs with us, whether it's on water flow leakage valves or electronic device that we can put in your house to detect surges, those kinds of things...all of that helps at the end of the day," USAA CEO Juan Andrade told CNBC.
