severe thunderstorm

Severe thunderstorms that struck the Victoria and Melbourne region of Australia on December 19th, bringing strong winds, large hail and flash flooding, are estimated to have already resulted in over AU $105 million of claims, a figure that is expected to rise significantly.

Catastrophe risk modelling specialist Karen Clark & Company (KCC) has announced the launch of a new severe convective storm risk model which shows that average annual losses caused by this peril are nearing $20 billion, which is higher than both hurricanes and earthquakes combined.

Risk modelling firm AIR Worldwide has released what it calls the first severe thunderstorm risk model for Australia that captures the three main sub-perils of tornado, hail and straight-line winds, a move that will help insurance, reinsurance and also ILS fund managers to better assess and manage risks in Australia.

Global natural catastrophes losses in the first-half of 2017 totalled an estimated $53 billion, with nearly half, almost $26 billion coming from the severe convective storm peril, which was also the costliest peril in terms of insured losses, according to reinsurance broker Aon Benfield.

By the end of the first-half of 2017 and once all loss estimates are finalised, it’s expected that insurance and reinsurance industry losses from severe convective storms, thunderstorms, tornadoes, large hail and associated damaging winds in the United States will have exceeded $14 billion.

The occurrence of severe thunderstorm weather in the United States could become even more frequent, Munich Re said today. At the same time another study says hail may increase in size. Both of which could mean higher costs and losses for insurance and reinsurance markets.

The month of May 2017 has resulted in an insurance and reinsurance industry loss of around $3 billion due to the impacts of severe convective storms, thunderstorms, tornadoes, large hail and associated damaging winds, taking the industry toll for the year-to-date to over $12 billion, according to Impact Forecasting.

Insurance and reinsurance industry losses from severe convective storms, thunderstorms, tornadoes, large hail and associated damaging winds, are now seen at around $11 billion for the year so far in 2017, the tenth consecutive year where severe thunderstorm insured losses have passed $10 billion.

The Denver, Colorado hail storm that struck the Front Range are on May 8th 2017 is expected to be the most costly insured loss in the state’s history, with the insurance and reinsurance industry estimated to be on the hook for $1.4 billion of losses.

Two of the largest insurers in the U.S., Allstate and Travelers, have both revealed first-quarter 2017 catastrophe losses today and the higher than expected figures are likely to be reflected in a rising attritional hit to some ILS funds and collateralized reinsurance structures.