APAC protection gap leaves $77b losses uninsured

Regional claims trailed the US total of $100b despite repeated catastrophes.

About 11.5% of Asia-Pacific’s (APAC) economic losses due to natural catastrophes were only insured last year, which is equivalent to over $10b of the $87b total economic loss, according to Gallagher Re.

APAC insurers faced another year of heavy catastrophe losses in 2025, even as global insured losses declined overall, according to Gallagher Re’s January 2026 Natural Catastrophe and Climate Report.

Asia’s protection gap stood at 88% over the 2016 to 2025 period, meaning most disaster losses remain uninsured. 

This continued to present both a challenge and an opportunity for insurers and reinsurers operating in the region.

One of the costliest events for the region was the China monsoon flooding, which caused $23b in economic losses. 

Insured losses were limited to about $600m. The low level of insurance penetration meant most of the financial burden fell on governments, businesses and households.

The March 28 Myanmar earthquake generated $15b in economic losses, with insured losses of $2.3b. 

Much of the insured impact was linked to Thailand. The event again exposed the gap between economic and insured losses in emerging Asian markets.

Tropical cyclones also drove losses. Cyclone Senyar, which affected Thailand, Indonesia and Malaysia, caused $11b in economic losses, but only about $800m was insured. 

In the Western North Pacific, insured losses were around $1.0b for the year, the lowest level for that basin since 2010.

The North Indian Ocean basin was the costliest globally on an economic basis in 2025 at $16b. However, only $1.1b of that was insured. 

Two rare cyclones, Senyar and Ditwah, triggered severe flooding and landslides in Thailand, Indonesia and Sri Lanka, causing significant human and economic losses but limited insurance recovery.

Japan’s August floods resulted in $500m in insured losses, showing that mature markets in Asia continue to generate meaningful insurance claims even when overall regional penetration remains low.

Across the broader APAC region, insured losses of roughly $7.2b in 2025 were well below the United States total of $100b. 

This gap reflects both lower insurance penetration and differences in market maturity.

The report noted that whilst global reinsurance capital remains strong at $838b, APAC remains structurally underinsured. 

For insurers, this means catastrophe volatility will continue to affect local balance sheets unevenly, with governments often absorbing the majority of disaster costs.