2026 MARKET TRENDS
Catastrophic Events & Claims Trends
Overview
Catastrophe activity remains elevated nationwide, sustaining pressure on underwriting, pricing and available capacity — particularly for homes in hazard-exposed regions. Climate volatility and rising property values continue to drive both the frequency and severity of losses, while severe convective storms are expanding across new geographies and seasons, reshaping risk profiles throughout the Northeast, Mid-Atlantic, Southeast and central states. In the West, wildfire exposure has become a year-round concern, contributing to persistent market instability. Carriers are responding with modernized CAT strategies, including advanced modeling, parametric solutions and more streamlined claims processes.
Climate volatility and rising property values continue to drive both the frequency and severity of losses
Market Conditions
Catastrophe losses remain historically high across the U.S., reshaping underwriting, pricing and carrier strategy heading into 2026. Climate-driven volatility, elevated property values and rising reconstruction costs continue to push more events over the billion-dollar loss threshold, directly influencing coverage availability, deductibles and overall market stability for high-net-worth households in hazard-exposed regions.
Carriers are also evolving rapidly in response to rising catastrophe severity, operational strain and increased regulatory scrutiny. Several strategic and operational shifts are accelerating across the market:
Greater use of parametric and index-based products offering faster payouts and simplified claims handling for exposures such as wind, quake, flood and wildfire.
Expanded investment in AI-driven catastrophe modeling, integrating satellite imagery, IoT data and real-time weather intelligence for more dynamic exposure insights.
Increased reliance on claims automation and straight-through digital processing to reduce delays after major events.
More anticipatory planning through pre-positioned contractors, claims teams and materials ahead of expected events.
Strengthened vendor and supply-chain partnerships to support faster recovery in strained markets.
More sophisticated use of fraud detection and claim-integrity tools, balancing automation with robust controls.
Higher expectations for model transparency and solvency oversight as regulators scrutinize governance and parametric payout accuracy.
Claims Trends
Claim severity and frequency continue to rise, driven by more intense weather extremes, increased development in hazard-prone areas and higher rebuilding costs. As the climate warms, wildfire conditions, hurricane intensity, heavy rainfall and severe convective storms are becoming more extreme, increasing the potential for large losses. Exposure levels continue to grow as more people, homes and high-value properties are built in coastal zones, wildfire-urban interfaces and floodplains. Inflation and elevated reconstruction costs are also pushing smaller events into billion-dollar territory.
Recent seasons reflect these pressures in the U.S. loss environment, even as the global reinsurance market remains well-capitalized. According to Climate Central, in 2025, the U.S. recorded 23 weather and climate disasters exceeding $1 billion, totaling an estimated $115 billion in losses — the third costliest year on record since 1980. The 2025 billion-dollar disasters were driven heavily by a record number of severe storm events including tornadoes, hail, and wind events, and heat-driven droughts.
Geographic & Regional Differences
Impacts & Customer Considerations
Catastrophe exposure will remain a central influence on coverage availability, pricing and deductibles across 2026. Homes in wildfire zones, coastal hurricane regions and severe-storm corridors should expect ongoing underwriting scrutiny. Carriers are increasingly rewarding properties with mitigation investments — such as fire-resistant construction, hardened exteriors, water-management controls and defensible space — with more favorable terms.
Proactive planning, complete documentation and early renewal engagement remain essential as catastrophe risk continues to evolve nationwide.
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