--- title: secondary perils are not secondary canonical_url: https://ensurance.app/guide/secondary-perils-are-not-secondary markdown_url: https://ensurance.app/guide/secondary-perils-are-not-secondary.md subtitle: "they caused 92% of insured natural catastrophe losses in 2025, reinsurers pushed frequency losses back to cedents in 2023, and the land decides part of it" category: nature-finance --- # secondary perils are not secondary *they caused 92% of insured natural catastrophe losses in 2025, reinsurers pushed frequency losses back to cedents in 2023, and the land decides part of it* In 2025, secondary perils caused a record 92% of global insured natural catastrophe losses, by the Swiss Re Institute's count. The word comes from a market where hurricanes and earthquakes set the reinsurance year. In 2025 it was not how the losses fell. Part of it comes from hazards partly decided on the ground: the fuel in a forest, the floodplain left open or filled, the marsh in front of a street. Those living systems do their work whether or not anyone pays. In Verisk's model, flood and wildfire are 13% of global insured average annual loss, against 40% for severe convective storm, which is not ours. The largest ground-related loss of 2025, the Los Angeles fires, is also the limit case for what ground work can do. :::johnson **some secondary perils are losses the land decides.** Hail is weather. But wildfire, river flood and coastal flooding from frequent storms are set in part by the forest, floodplain and marsh under the exposure, and no treaty pays to change that ground. [See the peril-by-peril table →](#how-much-say-the-ground-has-peril-by-peril) ::: ## what are secondary perils? **Secondary perils** are natural catastrophe hazards that cause frequent, low-to-medium severity losses (typically; a single wildfire or flood can reach peak-peril size: Los Angeles, 2025, about USD 40bn), as opposed to **peak perils**, the rare, high-severity events that drive a reinsurer's tail capital: tropical cyclone in the United States and Japan, major earthquake, European windstorm. The secondary list usually covers severe convective storm (hail, tornado, straight-line wind), river and flash flood, wildfire, winter storm and freeze, landslide and drought. The industry increasingly calls them **non-peak perils** or **frequency perils**, because "secondary" now misdescribes their share of the bill. These events rarely threaten a reinsurer's solvency one at a time. They threaten earnings by arriving often, hitting working layers and, before 2023, exhausting aggregate covers. ## their share of insured losses Sources count differently, so each figure is named. | measure | figure | source | |---|---|---| | Share of 2025 global insured nat-cat losses from secondary perils | Record 92% of USD 107bn | Swiss Re sigma 1/2026 | | Severe convective storm (SCS), 2025 insured | USD 51bn | Swiss Re sigma 1/2026 | | SCS, 2025 insured | USD 61bn, costliest insured peril of the century so far | Aon, January 2026 | | Floods, SCS and wildfire, 2025 insured | About USD 98bn of about USD 108bn | Munich Re, 2026 | | SCS share of insured losses, first nine months of 2026 | About 60%; US SCS at least USD 43bn, the fourth straight year above USD 40bn | Gallagher Re, 2026 | | SCS share of modeled global insured average annual loss | 40% (tropical cyclone 27%, earthquake 10%, flood 7%, wildfire 6%) | Verisk, 2026 | In 2023, the Swiss Re Institute counted a record 142 insured events and a record USD 64bn of SCS losses, 85% of them in the United States. The 2025 Los Angeles fires were the largest insured wildfire loss on sigma records. Verisk's figure is modeled. Swiss Re attributes most loss growth to exposure (values, urbanization, rebuild cost), with climate change amplifying some perils in some regions. The ground under the buildings explains part of the rest. ## why reinsurers pushed frequency back to cedents S&P Global (2024) describes the 2023 reset: reinsurers cut aggregate covers, moved up towers to higher attachment points, and cut their exposure to frequency losses. Primary insurers absorbed most SCS losses from 2023 through mid-2024. Two placements show the shape of it (Artemis, 2023). Zurich did not renew its global catastrophe aggregate cover. IAG's aggregate cover was cut from 350m to 250m at a higher attachment. The reasoning was sound. An aggregate cover protects against the sum of many mid-sized events, the part of the loss that the trend pointed to. Moving up the tower kept capital on the peak perils, where reinsurance does its best work: spreading a rare, very large loss across the world's balance sheets and recapitalizing a cedent (the primary insurer that buys the reinsurance) after the bad year. But the frequency loss did not go away when the cover did. It moved to the cedent's retention, then to deductibles and homeowners. The next post follows it down the tower. The point here is narrower: the frequency losses reinsurers chose to hold less of were mostly convective storm, which the ground does not set, but they include wildfire and flood, which local ground helps shape. ## how much say the ground has, peril by peril A treaty can price and layer a secondary-peril loss. It does not pay to change the place behind it. How much that place matters depends on the peril. | hazard | living system | what condition changes | how strong the ground's say is | |---|---|---|---| | Wildfire | Dry forest upwind of the exposure; chaparral, grass and shrubland | Fuel load, ladder fuels, canopy spacing, forest structure, fire returning at low intensity | Strong in fire-suppressed dry forest and at its edge; weaker in chaparral, grass and shrubland, where ignition and wind dominate, and weaker once embers carry fire into streets | | River and flash flood | Floodplain, wetland, upland soil and forest cover | Room for water to spread and slow; storage in wetlands; how much rain the soil takes in before it runs off | Moderate; strongest for frequent floods; thin evidence in loss terms | | Coastal flooding from frequent, lower-severity storms (not the tropical cyclone peak peril) | Salt marsh, mangrove, coral reef | Wave energy and water level at the shore before they reach the buildings | Strong for frequent, lower-severity events; limited against a major hurricane at landfall | | Hail and convective wind | None that matters at the scale of the loss | Very little. The storm forms in the atmosphere | Weak. Exposure, roof type, roof age and building codes dominate | ### wildfire Fuel is the side of the fire triangle people can manage at scale. Thinning, prescribed fire and cultural burning change how a fire behaves before it reaches homes. The Nature Conservancy and WTW (2021) put ecological forestry in the Northern Sierra into wildfire catastrophe models and found modeled average annual loss 40% to 60% lower. That is a model result for one landscape, not a claims record. Treatments fade as fuel regrows and need maintenance. Los Angeles in 2025 is the limit case: wind-driven fire moving through a city is a building-to-building problem. For the homeowner side, see [wildfire insurance non-renewal](/guide/wildfire-insurance-non-renewal?from=guide). ### flood A floodplain left open stores water that would otherwise reach a street. A wetland holds it. Soil with organic matter and roots takes in rain that compacted or paved ground sheds. Urban flash flooding is mostly drainage and impervious cover, not a living-system question. River flood is less studied in loss terms, so the say is moderate and the evidence in loss terms is thin. For a property owner's path, see [flood insurance disappearing](/guide/flood-insurance-disappearing-how-to-become-insurable?from=guide). ### coastal flooding from frequent storms Storm surge from a major hurricane is part of the peak peril, not the secondary count above. The part that belongs here is the coastal flooding from frequent, lower-severity events. Beck and colleagues (2018) found that without coral reefs, annual expected flood damages would double and frequent-storm costs triple. Menéndez and colleagues (2020) put mangroves' flood protection above USD 65bn a year. Both count total economic damages, mostly uninsured, not insured loss. The Swiss Re Institute (2025) found best-protected coastal habitat in Florida associated with about half the National Flood Insurance Program claim frequency in frequent storms (2009 to 2022). Narayan and colleagues (2017), using industry catastrophe models, estimated that coastal wetlands avoided about USD 625m of direct damage in Hurricane Sandy, and that Ocean County, New Jersey, marshes cut average annual flood losses 16%. Sandy was a large storm, so the USD 625m shows what marshes did in a big event, not that they stop one; the 16% is a modeled annual average. ### hail and convective wind Severe convective storm is the largest secondary peril in the Swiss Re, Aon, Gallagher Re and Verisk figures above, and it is the one where the condition of the land has least say. No forest, wetland or soil changes the size of the stone or the speed of the downburst at a meaningful scale. What changes the loss is what is exposed and how it is built: roof material and age, codes, the value of the stock in the path. The hail and wind losses are not ours. Ensurance does nothing for them. Wildfire, river flood and coastal flooding from frequent storms are the losses the land helps decide. Hail and wind are not. ## what funding the ground before the season looks like Reinsurance pays after the event. Faster cousins, such as [parametric covers](/guide/the-payout-that-misses-the-place?from=guide) and cat bonds, still pay after. This work is already done and paid for in places by land managers, tribes, agencies and philanthropy. What is missing is a payor on the loss side. Nothing in a treaty pays for it. **Ensurance** funds the condition of the named ground before the season: a forest treated before fire weather, a floodplain kept open rather than filled, a marsh kept in front of a street. It does that through a **certificate**, a record of funding tied to one named place, with the place's condition read beside the price ([specific ensurance](/specific?from=guide)). The test is a modeler's: same events, same exposure, with and without the work ([how an intervention lowers the loss](/guide/how-an-intervention-lowers-the-loss?from=guide)). Three limits belong next to that. No reinsurer has booked a loss reduction funded through ensurance, and no realized ensurance outcome exists yet. Ensurance does not reinsure anyone or hold tail risk. And the work touches the frequency layer of a few perils in specific places. It does not move peak-peril capital. For a cedent, the case is the retained layer it now carries alone; the [cheapest claim](/guide/the-carriers-cheapest-claim?from=guide) is the one that does not happen. For a government, it is the [protection gap](/guide/the-protection-gap-is-a-condition-gap?from=guide) seen as the condition of the land under it. The forest and the marsh are not worth only their avoided claims. The avoided claim is how a balance sheet learns to see them. If you underwrite or buy cover for wildfire or flood in a named zone, see [what we offer insurers](/solutions/insurers?from=guide&topic=reinsurance) or [talk to someone who can help](/contact?from=guide&topic=reinsurance). The series hub is [what reinsurance cannot cede](/guide/what-reinsurance-cannot-cede?from=guide). **Read next:** [the loss moved down the tower](/guide/the-loss-moved-down-the-tower?from=guide), on attachment points and where the retained loss lands. ## frequently asked questions ### what are secondary perils? Secondary perils are natural catastrophe hazards that cause frequent, low-to-medium severity losses: severe convective storm, flood, wildfire, winter storm, landslide and drought. They are contrasted with peak perils such as major hurricane and earthquake. The industry increasingly calls them non-peak or frequency perils. ### how much of insured natural catastrophe loss comes from secondary perils? A record 92% in 2025, by the Swiss Re Institute's count. Severe convective storm alone caused USD 51bn of insured loss in 2025 by Swiss Re's figure and USD 61bn by Aon's. ### why did reinsurers stop covering frequency losses? At the 2023 reset they cut aggregate covers and moved to higher attachments, so primary insurers kept most frequency losses (S&P Global, 2024). ### does ensurance reinsure secondary perils? No. Ensurance funds the condition of named ground before the season. It holds no risk, and no reinsurer has booked an ensurance-funded loss reduction. ## sources [Swiss Re Institute, sigma 1/2026: natural catastrophes in 2025, 2026](https://www.swissre.com/institute/research/sigma-research/sigma-2026-01-natcat-2025-wildfire-storm-risk.html) — 2025 insured USD 107bn; record 92% from secondary perils; SCS USD 51bn; LA wildfires about USD 40bn, largest insured wildfire loss on sigma records [Swiss Re Institute, record 142 natural catastrophes in 2023, 2024](https://www.swissre.com/press-release/New-record-of-142-natural-catastrophes-accumulates-to-USD108-billion-insured-losses-in-2023-finds-Swiss-Re-Institute/a2512914-6d3a-492e-a190-aac37feca15b) — Record 142 insured events; record USD 64bn SCS, 85% in the US [Insurance Journal, Aon global catastrophe report, 2026](https://www.insurancejournal.com/news/international/2026/01/21/855026.htm) — Aon: 2025 SCS USD 61bn [Captive.com, severe convective storms now costliest insured peril globally, 2026](https://www.captive.com/news/severe-convective-storms-now-costliest-insured-peril-globally) — Aon: SCS the costliest insured peril of the century so far [Munich Re, natural disaster figures 2025, 2026](https://www.munichre.com/en/company/media-relations/media-information-and-corporate-news/media-information/2026/natural-disaster-figures-2025.html) — Floods, SCS and wildfire about USD 98bn of about USD 108bn insured [Artemis, Gallagher Re global insured cat losses 9M26, 2026](https://www.artemis.bm/news/gallagher-re-estimates-global-insured-cat-losses-at-92bn-for-9m26-lowest-since-2019/) — SCS about 60% of insured losses; US SCS at least USD 43bn, fourth year above USD 40bn [Verisk, global insured catastrophe losses expected to average USD 171 billion annually, 2026](https://www.verisk.com/company/newsroom/global-insured-catastrophe-losses-now-expected-to-average-$171-billion-annually-verisk-finds/) — Modeled AAL shares: SCS 40%, tropical cyclone 27%, earthquake 10%, flood 7%, wildfire 6% [Risk & Insurance, natural catastrophe losses set to reach USD 145 billion in 2025, 2025](https://riskandinsurance.com/natural-catastrophe-losses-set-to-reach-145-billion-in-2025-with-1-in-10-risk-of-300-billion-peak-year/) — Swiss Re: loss growth mostly exposure; climate change amplifies some perils [S&P Global, global reinsurance highlights, 2024](https://insight.spglobal.com/story/global-reinsurance-highlights-2024/page/4) — Reinsurers cut aggregates, moved up towers, cut frequency exposure; primaries took most 2023–H1 2024 SCS losses [Artemis, Zurich opts to non-renew its cat aggregate reinsurance, 2023](https://www.artemis.bm/news/zurich-opts-to-non-renew-its-cat-aggregate-reinsurance-for-2023/) — Zurich's global cat aggregate not renewed [Artemis, IAG's aggregate reinsurance shrinks, attachment rises, 2023](https://www.artemis.bm/news/iags-aggregate-reinsurance-shrinks-attachment-rises-at-renewal/) — IAG aggregate cut from 350m to 250m at a higher attachment [TNC and WTW, wildfire resilience insurance, 2021](https://wtwco.com/en-US/Insights/2021/07/wildfire-resilience-insurance-quantifying-the-risk-reduction-of-ecological-forestry-with-insurance) — Northern Sierra ecological forestry: modeled AAL down 40% to 60% [Narayan et al., Scientific Reports 7:9463, 2017](https://doi.org/10.1038/s41598-017-09269-z) — Wetlands avoided about USD 625m in Sandy; Ocean County marshes cut average annual flood losses 16% [Beck et al., Nature Communications 9:2186, 2018](https://doi.org/10.1038/s41467-018-04568-z) — Without reefs, annual expected flood damages (economic, not insured) double and frequent-storm costs triple [Menéndez et al., Scientific Reports 10:4404, 2020](https://doi.org/10.1038/s41598-020-61136-6) — Mangroves' flood protection above USD 65bn a year in economic damages [Swiss Re Institute, natural habitats and coastal flood protection, 2025](https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-natural-catastrophe-risk/coastal-and-flood-protection-natural-habitats.html) — Florida NFIP claims 2009–2022: best-protected areas associated with about half the claim frequency, frequent storms ## the series 1. [what reinsurance cannot cede](/guide/what-reinsurance-cannot-cede?from=guide) 2. [secondary perils are not secondary](/guide/secondary-perils-are-not-secondary?from=guide) 3. [the loss moved down the tower](/guide/the-loss-moved-down-the-tower?from=guide) 4. [the model learns from a past that is leaving](/guide/the-model-learns-from-a-past-that-is-leaving?from=guide) 5. [capital is not the shortage](/guide/capital-is-not-the-shortage?from=guide) 6. [what a reinsurer can fund before the season](/guide/what-a-reinsurer-can-fund-before-the-season?from=guide)