severe thunderstorm

A recent outbreak of severe convective storm weather, so featuring tornadoes, severe thunderstorms, large hail and strong winds, which has been dubbed the “Ring of Fire” is expected to result in insurance and reinsurance industry losses of $2.5 billion, by catastrophe modellers Karen Clark & Company.

Between April 13th and 15th a major springtime storm system impacted central and eastern areas of the United States, bringing severe convective weather, thunderstorms, hail, tornadoes, flooding rains and heavy snow, resulting in damage across 20 states and economic and insured losses running into the hundreds of millions of dollars.

According to new research from catastrophe risk modelling specialists Karen Clark & Company, annual expected insured losses for the severe convective storm (SCS) peril in the United States are now approaching $25 billion, which is higher than hurricane and earthquake perils combined.

Winter storms and severe weather in March across the United States is likely to drive around $3 billion in economic losses, with two-thirds likely to fall to insurance and reinsurance, translating to an industry loss of roughly $2 billion for the month, according to Impact Forecasting.

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.