Natural disasters caused an estimated $3 billion in economic losses across Africa in 2025, with the vast majority of the damage uninsured, according to a report by German reinsurer Munich Re, highlighting the continent’s high exposure to climate-related shocks and limited insurance coverage.
In its annual natural catastrophe review published on January 13, Munich Re said cyclones accounted for more than half of the losses recorded in Africa last year. Major storms included cyclones that struck Madagascar in January and Mozambique in March 2025, causing widespread damage to homes, infrastructure and agriculture.
Munich Re cautioned that the $3 billion figure likely understates the true economic impact of extreme weather on the continent, as the assessment excludes losses linked to heatwaves and drought. These hazards, while often slower-moving than storms or floods, can have severe and long-lasting effects on food security, water availability and public health.
“Many losses, particularly in developing regions, are not fully captured in official statistics,” the report said, adding that weak data collection and limited insurance penetration continue to obscure the full scale of disaster-related damage in parts of Africa.
Of the total losses recorded on the continent, less than 20% — just over $500 million — were covered by insurance, underlining the wide protection gap between Africa and more developed regions. Low insurance coverage means governments, households and businesses often bear the cost of rebuilding themselves, placing additional strain on public finances and slowing economic recovery.
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By comparison, global economic losses from natural disasters totalled $224 billion in 2025, down nearly 40% from the previous year, Munich Re said. The decline was largely due to the absence of hurricanes making landfall in the United States for the first time in a decade, a factor that significantly reduced global insured losses.
Despite the year-on-year fall, global losses remained well above the long-term average. Munich Re noted that the 2025 figure exceeded the 30-year annual average of $192 billion recorded between 1995 and 2024, underlining the growing financial toll of extreme weather events.
Globally, about $108 billion of disaster-related losses were insured in 2025, roughly half of total economic losses. This contrasts sharply with Africa’s experience, where insurance coverage remains limited despite rising climate risks.
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Natural disasters killed about 17,200 people worldwide last year, up from around 11,000 deaths in 2024, according to the report. While the increase is significant, Munich Re said the figure remains well below the 30-year average of roughly 41,900 deaths per year, suggesting that early warning systems, improved infrastructure and disaster preparedness measures are beginning to reduce fatalities.
“In many regions, prevention and risk mitigation measures are proving effective in saving lives,” the reinsurer said, while warning that economic losses continue to rise as more assets are exposed to extreme weather.
Munich Re noted a shift in the types of disasters driving global losses. In previous years, large-scale events such as major earthquakes or powerful hurricanes accounted for the bulk of economic and human damage. In 2025, however, localised floods, severe storms and wildfires were the main contributors.
These so-called secondary perils caused an estimated $166 billion in losses worldwide last year, including $98 billion in insured losses. Both figures were above inflation-adjusted averages over the past 10 and 30 years, underscoring the growing impact of smaller but more frequent weather events.
The reinsurer said climate change is playing an increasingly important role, with persistent global warming contributing to more intense rainfall, stronger storms and extreme fire conditions. It noted that 2025 ranked among the warmest years on record, continuing a trend of rising global temperatures.
For Africa, Munich Re said the combination of high vulnerability, rapid urbanisation and low insurance penetration poses a growing challenge. Without greater investment in risk reduction, climate adaptation and insurance solutions, the economic and social costs of natural disasters on the continent are likely to rise further in the years ahead.
