By Scott Vincent

April 22 - (The Insurer) - Gallagher Re has estimated insured catastrophe losses will total $56 billion for the opening three months of 2025, 176% higher than the $20 billion first quarter average over the past decade.

In its Q1 2025 Natural Catastrophe and Climate Report, published on Tuesday, the reinsurance broker said it expects January’s Los Angeles wildfires to cost insurers $40 billion, which represents 71% of the first quarter total.

The wildfire estimate comprises $23 billion for the Palisades Fire and $17 billion for the Eaton Fire. Gallagher Re said the Palisades Fire alone is costlier than any other full year of wildfire insured losses on record.

The broker said the $40 billion wildfire loss total would suggest around 2% to 2.5% of global reinsurance capital will be affected.

The broker said it expected some reinsurance markets to re-underwrite and re-price the wildfire peril following the loss, alongside minor recalibration of bespoke wildfire models.

“We can foresee a renewed focus on catastrophe exposure within per risk and multiline contracts, with increased opposition to cedants seeking expanded coverage,” the report said.

The broker added that subrogation sales are providing some certainty for reinsurance outcomes, with bottom cat excess of loss layers still likely to gather support at upcoming renewals as reinsurers seek higher top-line premiums in a lower rate environment.

Alongside the wildfires, four other events saw insured losses reach or exceed $1 billion during the quarter, the broker said, all of which fall under the U.S. severe convective storm peril.

Most costly was a mid-March tornado outbreak, which Gallagher Re estimates to have cost insurers $5.4 billion.

Outside the U.S., Gallagher Re said Storm Éowyn, which affected the UK and Ireland on January 24 and 25, the Tainan City earthquake in Taiwan and Cyclone Alfred in Australia will all result in insured losses in the hundreds of millions of U.S. dollars.

Gallagher Re said the U.S. accounted for 93% of the global first-quarter insured loss bill, with the first quarter tally of $52 billion more than 300% higher than the decadal average of $13 billion.

Gallagher Re’s estimates include private market insurance and those covered by government-backed insurance entities.

Last week Aon estimated first-quarter insured catastrophe losses at $53 billion, including $37.5 billion of wildfire losses.