U.S. SCS losses hit $42bn in 9M’25, marking a ‘new normal’: Moody’s

According to Moody’s, insured losses from U.S. severe convective storm (SCS) events reached $42 billion in the first nine months of 2025, with average per-event costs running 31% higher than the prior decade’s average, setting what the firm describes as a new “normal” for extreme weather.

This year, between January and September alone the United States experienced 39 SCS events, with each event averaging over $1 billion in insured losses.

To put this into perspective, re/insurers and brokers estimated total SCS losses for the full 12 months of 2024 ranged between $51 billion to $57 billion.

Consequently, this means that the 9M’25 total is not far off from the 12-month total observed last year.

While estimates vary by firm, they confirm the high-loss trend, with broker Aon estimating that total global insured losses from SCS events for 9M’25  resulted in $57 billion, the third highest total on record for the period.

While reinsurance broker Gallagher Re pegged the 9M’25 total for US SCS insured losses at $61 billion.

Moody’s notes that the surge in SCS losses is being driven by range of factors, including expanding urban exposure, which within the U.S. has expanded by 20% since 2000, creating a larger “bullseye” for storm impacts.

Rising raw material costs and social inflation are also significant contributors too.

“With SCS insured losses significantly outpacing those from hurricanes since 2020, the insurance industry is searching for ways to transform how it understands, quantifies, and manages this escalating risk – including through transparent and granular solutions such as Moody’s North American SCS HD model, launching this December,” Moody’s explained.

According to Moody’s, the new model includes detailed claims data, high-resolution radar data and explicit derecho modeling, dynamic roof methodology, and post-event loss amplification (PLA) features.

Additionally, the model was developed in collaboration with the insurance industry and will help aid it in providing better coverage options, ultimately bringing more capital back into a better-stabilized market.

Julie Serakos, Managing Director, Model Product Management, Moody’s, commented: “Modeling severe convective storms – which have caused, on average, over $45 billion in U.S. insured losses over the last five years – has long been plagued by computational challenges and unreliable, highly-localized hazard data.

“Moody’s new HD SCS model breaks through those barriers, giving insurers sharper, more dependable risk insights that will help enhance coverage and stabilize markets.”

The rising frequency and impact of severe convective storms is also being reflected in the catastrophe bond space, where the first pure SCS cat bond since 2010 has recently come to market.