Natural disasters are a top concern among business leaders. Global economic losses from natural disasters in 2024 were estimated to reach at least $368 billion and exceeded the 21st-century average ($324 billion) and median ($329 billion) on a price-inflated basis. Also, 2024 saw estimated global insured losses of $154 billion, 27% above the most recent 10-year average.1,2
Extreme weather events in early 2025 have only amplified those worries. January’s greater Los Angeles wildfires are now set to be one of the costliest disasters in the city’s history, and by March, over 100 tornadoes had swept across the central, southern and eastern U.S.3,4
With most U.S. geographies now exposed to some degree of catastrophic weather, businesses will need to shift from response to resilience planning. Insurers with a mitigation-first mindset and deep expertise in catastrophe perils, data and risk engineering strategies can help.
Applying a Mitigation-First Approach to Extreme Weather Risk
Based on research completed by The Hartford, 44% of businesses ranked natural disasters as their primary worry, and 37% cited extreme weather as a factor.5 Nearly two-thirds (59%) say they are increasingly concerned about business interruptions, where weather typically plays a serious role.6 As weather events worsen around the globe, continual disaster planning can make the difference between a short-term business disruption and business closure.
A basic mitigation-first approach to extreme weather can help companies prepare for risks:
- Make consistent updates to employee safety procedures and all business continuity plans.
- Plan immediate structural improvements that can potentially keep damage and premium costs under control. These can include storm-resistant construction features, flood barriers, offsite digital record storage and backup power sources.
- Create or enhance future safety, facility and technology strategies to keep workers, processes, facilities and digital assets protected as the company grows.
- Develop more resilient supply chains to prevent operational, production and shipping breakdowns and delays.
- Permanently automate and offsite all payroll, HR and other data-related functions so key business processes are always in a state of readiness.
Adding a Data-Driven Resiliency Approach Throughout the Enterprise
By leveraging high-quality data based on claims and other internal sources, companies can accurately assess weather risks, identify potential hazards and prioritize adaptation measures. This approach not only helps to mitigate the impacts of natural disasters but also supports the business’ overall resiliency.
Data from claims, operations and other sources can help create:
- Comprehensive risk assessments that regularly evaluate exposure to weather-related events and help business leaders adjust risk mitigation plans accordingly.
- Resilient infrastructure investments that strengthen facilities, supply chains and operational plans to withstand extreme weather.
- Data-driven insurance partnerships with carriers who leverage their advanced modeling and industry expertise to provide tailored risk solutions.
- Advanced business continuity and emergency strategies to deliver robust response plans that minimize disruption and ensure employee safety.
Balancing Risk Mitigation and Adequate Coverage
Risk mitigation helps companies navigate extreme weather emergencies while influencing and strengthening their resiliency strategies.
However, losses can still occur, which is why risk mitigation and insurance planning should be viewed holistically as part of any companywide risk management plan. Business leaders should choose an experienced carrier who understands the full range of exposures arising from catastrophe perils, including named storms, earthquakes, floods, severe convective storms, wildfires and winter storms or freeze events.
A trusted insurance partner can also help companies ensure adequate insured limits and coverage valuation for structures, equipment, machinery and business interruption.
Learn more from The Hartford's 2025 Risk Monitor report.
1 Climate and Catastrophe Insight report, Aon, published January 21, 2025.
2 “Natural Disasters Cost Global Economy $417 Billion in 2024: Gallagher Re,” Risk & Insurance, January 21, 2025.
3 “Economic Impact of the Los Angeles Wildfires,” UCLA Anderson School of Management, March 3, 2025.
4 “Tornado Outbreak,” The Weather Channel, March 21, 2025.
5,6 The Hartford’s 2025 Risk Monitor Report, viewed April 2025.
