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Systems and sectors at baseline

7 min read0 figures2 tables18 notesNR-STRATEGIC-INSURANCE-GLOBAL-2026-BASELINE

Contents
  1. ·Edition home
  2. ·Executive summary
  3. 1Protection gaps are shared risk
  4. 2Key findings
  5. 3Systems and sectors at baseline
    1. 3.1 Where each system stood at evidence close
    2. 3.2 Domain posture
    3. 3.3 Sector screens
  6. 4Risks and capability
  7. 5Large insured loss that meets soft pricing and thin backstops
  8. 6Readings from the other desks
  9. 7The 2027 agenda
  10. 8Systems in depth
  11. AMethodology
  12. BData appendix
  13. CReferences and record
  14. ·Complete edition, for print

3.1Where each system stood at evidence close

FIN · Insured loss

Global insured natural catastrophe losses, range of four estimates

107 to 129USD billion

four publishers, different scope.

Reported2025Swiss Re, Munich Re, Aon, Gallagher Re1234

FIN · Gap

Uninsured share of 2025 economic losses, two estimates

51 to 56%

Aon 51%, Gallagher Re 56%.

Reported2025Aon, Gallagher Re34

CLI · Perils

Share of insured losses from secondary perils

92%

a record on sigma series.

Reported2025Swiss Re1

FIN · Residual market

California FAIR Plan exposure

773USD billion

698,307 policies.

Reported2026FAIR Plan8

INF · Flood scheme

US flood programme authorised to

11 Dec2026

36 short-term reauthorisations since FY2017.

Reported2026CRS10

SYS · Cross-system

Global protection gap, all perils

1.83USD trillion

premium equivalent.

Reported2023Swiss Re5

3.2Domain posture

Each of the twelve coupled domains is read through insurance and protection gaps, in words, not scored. The coupling column names the dependency that carries insurance and protection gaps risk into each domain.

Table 3.1Each domain read in words, not scored
DomainPosture at baselineCouplingStatus
WATFlood is the peril most often left uncovered by homeowners policies; Swiss Re put 2025 flood insured losses at USD 3.4 billion.WAT → FOO, HLTReported EQL 3
ENEPower and energy assets sit inside property and business interruption cover; no consolidated series here.ENE → FOOInferred EQL 2
FOOCrop cover is run through public-private programmes in some markets; no global series bound here.WAT → FOOExpert input EQL 2
HLTHealth and mortality protection gaps are tracked separately and are not consolidated here.WAT → HLTInferred EQL 2
BIONatural buffers can lower insured losses; evidence not consolidated here.BIO → WATExpert input EQL 2
CLISecondary perils made up 92% of 2025 insured losses; insured losses grow 5% to 7% a year.CLI → FINReported EQL 4
INFThe US flood programme is authorised to 11 December 2026 with 4.5 million policies.INF → FINReported EQL 4
FINThe core system: 51% to 56% of 2025 economic losses uninsured; USD 1.83 trillion gap in 2023.the core systemReported EQL 4
DATCyber cover is young: premiums close to USD 15 billion in 2025; data on insured share of loss are thin.DAT → FINReported EQL 3
AICModels and data shape pricing and availability; no consolidated series here.AIC → FINInferred EQL 2
MINRepair and rebuild costs depend on materials and trades; no series bound here.MIN → FINInferred EQL 2
TRDReinsurance is a cross-border market; January 2026 rates fell 14.7%.FIN ↔ TRDReported EQL 3

3.3Sector screens

All sixteen sectors are screened for their dependence on insurance and protection gaps, on the same grammar as every national edition. The evidence column describes coverage of the baseline evidence, not the performance of the sector.

Table 3.2Sectors: baseline evidence and the exposure to watch
CodeSectorBaseline evidenceExposure to watchEvidence coverage
GS-00Cross-systemprotection gaps couple every sector34large insured loss with thin backstopsPARTIAL
GS-01Waterflood cover is thin in homeowners policies11uninsured flood lossPARTIAL
GS-02Energyenergy assets sit inside property coverlarge energy lossTHIN
GS-03Food and agrifoodpublic-private crop programmes24crop and flood lossTHIN
GS-04Healthhealth and mortality gaps tracked apart5unpriced health shocksTHIN
GS-05Finance and economyUSD 1.83 trillion gap across perils5cover pulled from a marketGOOD
GS-06DevelopmentUSD 9 billion insured of about USD 73 billion in Asia-Pacific2low take-upPARTIAL
GS-07Climatesecondary perils are 92% of insured losses1wildfire and storm trendGOOD
GS-08Disasterpublic and parametric schemes4818concurrent hazardsPARTIAL
GS-09Infrastructureinfrastructure losses sit in sibling editionsasset concentrationTHIN
GS-10Citiesdense exposure in single hazard zones8urban wildfire or floodPARTIAL
GS-11Biodiversitynatural buffers for hazard lossloss of buffersTHIN
GS-12Earth observationhazard data feed catastrophe modelsmodel and data changeTHIN
GS-13Cyber and digitalcyber premiums close to USD 15 billion19accumulation of cyber lossPARTIAL
GS-14PolicySolvency II amendments and disclosure rules2122implementation gapsPARTIAL
GS-15Scienceinsurance economics is mature38394041data at market scalePARTIAL

Notes

Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references

  1. 1Insurance Journal and Reinsurance News (eds.), reports of Swiss Re Institute, sigma 1/2026, Natural catastrophes in 2025: the persistent rise of wildfire and storm risk (insured losses USD 107 billion; economic losses USD 220 billion; 92% from secondary perils; Los Angeles wildfires USD 40 billion; trend 5% to 7% a year; 2026 normal level USD 148 billion and peak scenario about USD 320 billion), articles of March 2026. The sigma report itself was not opened; the Swiss Re page returned an access error. Observation year 2025. Accessed 2026-11-03.back
  2. 2Insurance Journal, Insurance Business and Reinsurance News (eds.), reports of Munich Re, natural disaster losses in 2025, 13 January 2026 (overall losses about USD 224 billion; insured about USD 108 billion; Asia-Pacific about USD 73 billion overall and USD 9 billion insured; Africa about USD 3 billion; January 2026 reinsurance rates down 14.7%). One article printed USD 244 billion for overall losses, a typographical conflict with USD 224 billion elsewhere. The Munich Re release was not opened. Observation year 2025. Accessed 2026-11-03.back
  3. 3Aon (ed.), 2026 Climate and Catastrophe Insight (page read to character 100,000 of 220,843: economic losses USD 260 billion; insured losses USD 127 billion; protection gap 51%, a record low). Aon, London. Observation year 2025. Accessed 2026-11-03.back
  4. 4Reinsurance News (ed.), report of Gallagher Re, Natural Catastrophe and Climate Report, full year 2025 (insured losses USD 129 billion; economic losses USD 296 billion; protection gap 56% or USD 167 billion; United States USD 100 billion or 78%). The Gallagher Re report was not opened. Observation year 2025. Accessed 2026-11-03.back
  5. 8California FAIR Plan Association (ed.), Key Statistics and Data (September 2026: 698,307 policies in force; exposure USD 773 billion; written premium USD 2.04 billion; policies up 157% and exposure up 252% since September 2022). California FAIR Plan Association, Los Angeles. Observation year 2026. Accessed 2026-11-03.back
  6. 10Congressional Research Service (ed.), What Happens If the National Flood Insurance Program (NFIP) Lapses?, Insight IN10835, version of 11 September 2026 (authorised to 11 December 2026; 36 short-term reauthorisations since FY2017; lapses 1 October to 12 November 2025 and 1 to 3 February 2026; borrowing limit USD 30.425 billion; nearly 4.5 million policies; almost USD 1.3 trillion coverage). Library of Congress, Washington. Observation year 2026. Accessed 2026-11-03.back
  7. 5Artemis (ed.), report of the Swiss Re Institute sigma resilience index published in July 2024 (global protection gap USD 1.83 trillion in 2023; natural catastrophe gap USD 385 billion premium equivalent; natural catastrophe resilience 25.7%; United States 39%; national values from about 5% to above 80%). The sigma report was not opened. Observation year 2023. Accessed 2026-11-03.back
  8. 11FEMA (ed.), FloodSmart (most homeowners insurance does not cover flood damage; almost one third of NFIP claims come from outside high-risk flood areas, stated as 29%). Federal Emergency Management Agency, Washington. Observation year 2026. Accessed 2026-11-03.back
  9. 24USDA Risk Management Agency (ed.), About RMA (created 1996; supports the private insurers that sell federal crop insurance). US Department of Agriculture, Washington. Observation year 1996. Accessed 2026-11-03.back
  10. 48CCRIF SPC (ed.), CCRIF in a Snapshot, brief revised April 2025 (78 payouts totalling about USD 390 million between June 2007 and April 2025; 30 members as of June 2024). The PDF was opened and its text read. CCRIF SPC, Grand Cayman. Observation year 2025. Accessed 2026-11-03.back
  11. 18Australian Reinsurance Pool Corporation (ed.), Cyclone Reinsurance Pool (commenced 1 July 2022; annually reinstated government guarantee of 10 billion, stated as dollars and read here as Australian dollars; mitigation discounts; cost-neutral to government over the longer term). ARPC, Canberra. Observation year 2022. Accessed 2026-11-03.back
  12. 19Munich Re (ed.), Global Cyber Risk and Insurance Survey 2026 (premium volume nearly USD 15 billion in 2025; about USD 28 billion forecast for 2030; over 9,500 respondents in 20 countries). Munich Re, Munich. Observation year 2025. Accessed 2026-11-03.back
  13. 21IFRS Foundation (ed.), IFRS S2 Climate-related Disclosures (issued June 2023; effective for periods from 1 January 2024; amendments to greenhouse gas emissions disclosures issued December 2025). ISSB, London. Observation year 2023. Accessed 2026-11-03.back
  14. 22EIOPA (ed.), Solvency II (Directive (EU) 2025/2 amends the framework; new rules apply from 30 January 2027). European Insurance and Occupational Pensions Authority, Frankfurt. Observation year 2025. Accessed 2026-11-03.back
  15. 38UNVERIFIED, not opened: Arrow, K.J., Uncertainty and the welfare economics of medical care, American Economic Review 53(5), 941 to 973, 1963, cited from memory. Observation year 1963. Accessed 2026-11-03.back
  16. 39UNVERIFIED, not opened: Akerlof, G.A., The market for lemons: quality uncertainty and the market mechanism, Quarterly Journal of Economics 84(3), 488 to 500, 1970, cited from memory. Observation year 1970. Accessed 2026-11-03.back
  17. 40UNVERIFIED, not opened: Rothschild, M. and Stiglitz, J., Equilibrium in competitive insurance markets: an essay on the economics of imperfect information, Quarterly Journal of Economics 90(4), 629 to 649, 1976, cited from memory. Observation year 1976. Accessed 2026-11-03.back
  18. 41UNVERIFIED, not opened: Kunreuther, H. and Pauly, M., Neglecting disaster: why don’t people insure against large losses?, Journal of Risk and Uncertainty 28(1), 5 to 21, 2004, cited from memory. Observation year 2004. Accessed 2026-11-03.back

Cite this chapter

Valadbaygi, S. (Ed.). (2026). Chapter 3: Systems and sectors at baseline. In Strategic Systems Report 2026: Insurance, Protection Gaps and Insurability (Baseline Edition 2026, Report No. NR-STRATEGIC-INSURANCE-GLOBAL-2026-BASELINE) [Draft under review]. The Global Centre for Risk and Innovation (GCRI).

Every citation form of the whole report, BibTeX and RIS included, is on the edition home. Cite this report

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