The $424 Billion Protection Gap: What Swiss Re's Index and the RiskScan 2026 Survey Say About Who Bears Disaster Losses

Two pieces of research published within days of each other in June 2026 offer a detailed look at how much of the world's disaster risk is not covered by insurance. The first is Swiss Re Institute's Natural Catastrophe Insurance Resilience Index, reported by Insurance Business on June 5. The second is RiskScan 2026, a survey released on June 8 by the Insurance Information Institute, known as Triple-I, and Munich Re US. Read together, they show a gap that is growing in dollar terms, a coverage ratio that has barely moved in a decade, and an industry that increasingly sees its risks as linked rather than separate.

Start with the headline number. Swiss Re Institute estimates that the global natural catastrophe protection gap reached $424 billion in 2025, up from $395 billion in 2024. The institute measures the gap in premium terms. It is the additional premium that would be needed to fully cover expected economic losses, beyond what is currently written. The article does not give separate totals for insured and uninsured losses, but it does report that insured losses in 2025 were $107 billion. Swiss Re says the widening of the gap is mainly the result of rising values of exposed assets, with economic growth the main driver, and that the gap has tracked nominal GDP growth. It adds that insurance cover has broadly kept pace with the growth in exposure overall. In plain terms, there are more buildings, vehicles and businesses in harm's way, worth more money, and insurance has grown with them, but not enough to close the distance.

The coverage ratio shows the same pattern. Swiss Re puts global coverage at about 27.3% in 2025, roughly flat from 2024 and up about two percentage points from 25.3% in 2015. By region, advanced EMEA rose to 41.3% from 37.1% in 2015 and advanced Asia Pacific rose to 29.1% from 22.5%. North America has been stable at roughly 40% to 42% since 2015, but uninsured losses are growing because exposure is concentrating in hazard-prone places and rebuilding costs are rising. Latin America and emerging EMEA are at about 8% to 9%, and emerging Asia at about 5%, which means almost all new exposure there is uninsured. The index offers some examples of what is possible. In Germany, fire and storm insurance covers about 99% of residential buildings, and flood cover has grown to 57% of households from about 20% two decades ago. Earthquake cover in California went the other way: only 12% of residential policies included it in 2024, against 30% at the time of the 1994 Northridge earthquake.

Looking ahead, Swiss Re says that if insured losses continue to grow at 5% to 7% a year in real terms, global insured losses could reach $186 billion by 2030, up from $107 billion in 2025. That is a projection that depends on its assumed growth rates, not a forecast of a specific year.

The second study looks at how people inside and outside the industry perceive risk. According to Insurance Business, RiskScan 2026 surveyed more than 1,700 participants in the United States and United Kingdom across five segments: consumers, small business owners, middle-market decision-makers, property and casualty agents and brokers, and property and casualty carriers. It was published in two reports, one on reinsurance exposures and one on specialty insurance. Its central finding is that respondents in every segment see cyber incidents, economic volatility, natural catastrophes, artificial intelligence, business interruption and emerging liability exposures as connected, not isolated. AI was ranked as the most impactful emerging technology across all segments. The article does not give numeric rankings. The survey also found that perils outside the traditional peak catastrophe categories, such as floods, severe storms, winter weather and wildfires, are seen as frequent and high impact, which challenges assumptions about how well catastrophe risk can be diversified. The specialty report found that cyber and flood protection gaps persist and are widening, and respondents recognised legal system abuse as a driver of rising property and casualty costs.

Several people quoted in the coverage add detail. Triple-I's chief economist, Michel Léonard, said economic conditions are amplifying insurance risk across affordability, claims severity and capital allocation. Jennifer Wilson of the broker Newfront said inconsistent policy language across insurers complicates coverage decisions. Timothy Zeilman of HSB said AI risk resembles the early days of cyber, when exposures sat largely hidden inside traditional policies, and the article cites an HSB finding that 74% of small businesses already use AI tools. Triple-I chief executive Sean Kevelighan said recognising risk is only the first step and called for collaboration to close protection gaps.

Can the gap be narrowed? Swiss Re's index includes evidence that adaptation pays. It reviewed US adaptation projects approved from 2010 to 2022, worth about $9 billion in combined nominal value. Every project with a disclosed benefit-cost ratio had positive net benefits, and the median ratio was 1.86, ranging from 1.2 for urban flood defences in Cedar Rapids to 9.63 for levees on the Middle Rio Grande. After Hurricane Sally in 2020, homes in Alabama built or retrofitted to the IBHS Fortified standard had 55% to 70% lower claim frequency, 14% to 40% lower claim severity and loss ratios 51% to 72% lower than conventional homes. Swiss Re concludes that pairing broader insurance coverage with targeted risk adaptation in exposed areas is the most viable way to narrow the gap.

What should readers take from this? For households, the practical question is whether your policy covers the perils most likely to affect you, since standard home policies often exclude flood and earthquake. For businesses, the survey's emphasis on connected risks suggests reviewing cyber, business interruption and supply-chain exposures together. For policymakers, the evidence points to a combination of prevention, building standards and risk-based planning, with insurance supporting rather than replacing them.

Two cautions apply. The protection gap is an estimate based on models and assumptions, and different institutions measure it differently, so figures from other researchers will not match. And a survey of perceptions, like RiskScan, shows what people believe, not what will happen. The two studies are best read as complementary: one measures the size of the gap, the other explains how the industry is thinking about it.