severe thunderstorm

Industry insured losses from severe convective storms in the United States have already exceeded $31 billion, which makes 2024 one of the top-4 most costly years for the peril already, according to Steve Bowen, Chief Science Officer at reinsurance broker Gallagher Re.

With insurance industry losses from US severe weather events having already surpassed $10 billion this year and the toll from many events still being calculated, Andrew Siffert, Senior Meteorologist at insurance and reinsurance broking specialist BMS, has warned that forecasts for the coming days and weeks could take the toll on par with last year.

According to global reinsurance giant Swiss Re’s sigma research team, insured losses from severe thunderstorms reached a record high of US $60 billion in 2023, while overall natural catastrophe insured losses are estimated to have surpassed $100 billion again in 2023.

Insurance and reinsurance market losses from the severe convective storm (SCS) peril in Europe are starting to run a little ahead of losses from the more widely accepted European peak peril of extratropical windstorms, according to data from Aon’s Impact Forecasting.

As participants in the insurance, reinsurance and insurance-linked securities (ILS) industry grapple to understand the extent of their possible exposure to the severe convective storms and tornadoes of recent days, AM Best has warned that loss events like this will drive a re-examination of aggregate reinsurance pricing and supply.

Our sister publication Reinsurance News surveyed a segment of its industry readership as to how high they anticipate the insurance and reinsurance market loss from the recent severe storm and tornado outbreak will rise, with the largest percentage opting for between $2.5 billion and $5 billion.

Preliminary data from CoreLogic shows that properties with a reconstruction value of almost $3.7 billion were exposed to the tornado outbreak at the weekend, with $2.9 billion in Kentucky alone.

The recent outbreak of deadly tornadoes and damaging severe convective storms in the United States has been estimated as a roughly $3 billion insurance industry loss, by risk modeller Karen Clark & Company.

Broking powerhouse Aon has warned that the industry faces a multi-billion loss from the US tornadoes that struck at the weekend, but notes that at this stage it only anticipates a “limited portion” of the losses being ceded to reinsurance.

Lloyd’s of London syndicate manager and private capital specialist Argenta Group suggests that the weekend tornado damage in the southeastern United States could result in an industry loss that it likens to the 2020 Derecho event, that resulted in an estimated $7 billion of costs for insurance and reinsurance markets.