Swiss Re and a $300bn loss

​Swiss Re’s head of P&C reinsurance, Leopold Camara, made an interesting observation at Baden-Baden recently which made some headlines in the insurance press. His view was that the global insurance market could soon face it’s first $300bn year of insured cat losses, and that the return period for such a year is around a 1-in-10. [1]

​I thought it would be interesting to try to build a simple model and see what kind of assumptions we need to make to back-in this claim.

Source: Sigma 1/2025: Natural catastrophes: insured losses on trend to USD 145 billion in 2025. www.swissre.com/institute/research/sigma-research/sigma-2025-01-natural-catastrophes-trend.html

Firstly, let’s collect data on historic years. Helpfully Swiss Re provide data for this metric in their 01/2025 Sigma report [2]. 

​The above graph is taken from that report, and we can see that the losses are in 2024 dollar prices, but reading the fine print in the report tells us they have just revalued using US cpi. As the graph highlights, there is still a clear upwards trend in the data. This represents a number of factors; social inflation (i.e. the increase in inflation excess of CPI inflation), asset build up in exposed areas, and also probably an element of climate change.

Let’s get this data into a Jupyter notebook and proceed from there, and see if we can arrive at a similar value.

Conclusion
​
There we go, we were actually able to fairly easily arrive at a similar estimate of the 1-in-10 global nat cat value of $300bn by just leveraging Swiss Re's public data in a fairly transparent way.
​
​ 
[1] Baden-Baden: Swiss Re warns of $300bn cat year as geopolitical and civil unrest risks rise | Global Reinsurance
[2] sigma 1/2025: Natural catastrophes: insured losses on trend to USD 145 billion in 2025 | Swiss Re