Government forecasters are warning that the 2025 Atlantic hurricane season could be more active than usual, potentially putting even more pressure on an insurance industry already grappling with massive losses from recent disasters.
The National Oceanic and Atmospheric Administration (NOAA) announced Thursday that there is a 60% chance of an above-average season, with 13 to 19 named storms expected. Of those, six to 10 are projected to become hurricanes, including three to five major hurricanes.
Laura Grimm, acting administrator of NOAA, emphasized the agency’s readiness during a news conference in Jefferson Parish, Louisiana, marking 20 years since Hurricane Katrina. Despite questions about budget cuts, she reassured the public that NOAA remains fully staffed and operational, stating, “Protecting lives and property is our top priority.”
Last year’s hurricanes Helene and Milton caused over $37 billion in insured losses, and severe weather has already cost insurers heavily in 2025. January wildfires in California resulted in more than $50 billion in insured damages, and the Midwest has seen an unusually high number of tornadoes and severe storms, adding another $17 billion in losses.
Despite 2024 being a challenging year, the U.S. property and casualty insurance sector posted its strongest underwriting results since 2013. However, industry analysts warn that the combination of weather-related disasters and economic uncertainties, including tariffs, could threaten profitability in 2025.
Reinsurance costs, which allow insurers to spread risk, are now at a 20-year high, and access to reinsurance is becoming increasingly limited. “It’s an existential threat to the insurance industry,” said Bill Clark, CEO of reinsurance analytics firm Demex.
Insurers are calling for stronger mitigation efforts and community resiliency. These include tougher building codes, improved public infrastructure, and better land management. According to FEMA, every dollar invested in mitigation saves an estimated $13 in disaster recovery.
Jefferson Parish President Cynthia Lee Sheng highlighted the progress made since Hurricane Katrina in 2005, which claimed over 1,300 lives. “We’ve transformed our recovery approach. Agencies now work closely to respond quickly and effectively,” she said.
As hurricane season approaches, both government officials and insurers are urging homeowners and businesses to prepare and invest in risk reduction strategies.
