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A report by the Emirates News Agency detailed how climate disasters put pressure on Europe’s insurance systems. Munich Re’s natural disaster figures for 2025, released on January 13, 2026, placed losses in Europe at about $11 billion, of which around half was insured. The data showed weather disasters accounting for 92 percent of all losses and 97 percent of insured losses that year, with non-peak perils such as wildfires, intense thunderstorms and flooding driving the majority of claims. This development reflects a broader pattern of increasing climate-related costs for the sector.
The prior year proved even more costly as Munich Re data placed 2024 European natural disaster losses at $31 billion overall with $14 billion insured. Extreme flooding in eastern Spain around Valencia generated $11 billion in total damages including $4.2 billion insured while events in Germany and across Central and Eastern Europe in June and September contributed a further $9 billion in losses of which $4 billion was insured. These consecutive years of elevated impacts have heightened concerns within the industry about long-term viability of coverage in vulnerable regions.
According to an EIOPA paper, natural catastrophes caused approximately $900 billion in direct economic losses in the EU from 1981 to 2023 with more than one-fifth of that total occurring in the past three years. The European Insurance and Occupational Pensions Authority found that only about one-quarter of losses were insured on average and that this share has been declining since 2015. The assessment identified Europe as the fastest-warming continent and projected that the insurance protection gap will widen further as climate change intensifies the frequency and severity of extreme events.
A separate 2026 report from the Stockholm Environment Institute noted that insured catastrophe losses have grown by 5 to 7 percent per year in real terms. The analysis attributed the increase to rising asset values in hazard-prone areas, continued development in exposed locations and the growing influence of climate change on weather extremes. It warned that reinsurance systems face mounting constraints from systemic and compounding climate shocks that challenge traditional risk diversification approaches.
Munich Re has conducted climate risk research since the 1970s and its ongoing work underscores the importance of adaptation measures to limit future insured losses. The reinsurance leader’s annual reviews have consistently highlighted how prevention, improved building standards and better land-use planning can reduce the overall burden on insurance markets. Recent proposals from EIOPA for an EU-level natural catastrophe risk scheme aim to pool exposures across member states and improve affordability and availability of coverage.
The EIOPA document also pointed to low risk awareness and dependence on post-disaster government aid as factors suppressing insurance uptake among households and businesses. It suggested that a coordinated European system could lower capital requirements for insurers by spreading risks more effectively while incentivising resilience investments. Such steps would help address the protection gap that has left the majority of climate-related losses uninsured in recent decades.
