A substantial severe weather outbreak in the Midwest of the United States this week is seen as having the potential to result in a top-10 severe weather insurance industry loss event, which would imply the cost could be around $5 billion or higher to the market, according to broker Aon.
The severe weather outbreak impacted the Midwest on July 27th 2026 and storms moved to impact the eastern US on July 28th.
Severe convective storms (SCS) drove high winds, large hail and some tornadoes across affected regions, resulting in significant property damage in some areas, Aon’s reporting explains.
Most notably, an EF3 tornado caused major damage to the Appleton and Menasha towns of the Fox Cities region of Wisconsin, while the Chicago metro area was hit by very intense wind and hail impacts.
There was “extensive property and infrastructure damage, as well as hundreds of thousands of power outages,” Aon explained, which leads it to estimate the insurance and perhaps reinsurance market loss will “reach the low-to-mid single-digit billions of USD.”
Insurance and reinsurance broker Aon explained in its weekly cat report, that 3 inch hail was seen widely, while supercellular storms across Wisconsin and Illinois produced intense and widespread winds, hail, rainfall and tornadoes.
“A powerful tornado directly hit parts of Appleton and Menasha in the Fox Cities region of Wisconsin. Damage surveys conducted by the National Weather Service (NWS) later determined the twister had peak winds of 140 mph (225 kph), reaching EF-3 intensity,” the broker reports, noting that homes and businesses in the path of the tornado were destroyed.
After this, supercells and another line of storms moved towards the Chicago metro, with hurricane force wind gusts and hail larger than 2 inches, as well as localised flooding being observed.
On July 28th, another round of storms impacted further east, including the Mid-Atlantic, with large hail, damaging winds, heavy rain and some more tornadoes being reported.
Aon commented on the potential financial impacts of this weeks severe weather in the United States, “Given the extensive wind, hail, and tornado damage seen in eastern Wisconsin and northern Illinois, total economic and insured losses will likely reach the low-to-mid single-digit billions of USD.
“With this potential incurred loss figure, the recent Midwest severe weather outbreak may rank near or among the top 10 costliest severe weather events in U.S. history.”
At the bottom of that list of the 10 costliest US severe weather outbreaks is a $4.9 billion industry insured loss event from March 2024.
As a result, for this to rank higher it suggests the insurance market could ultimately face around $5 billion or more in losses from this week’s severe weather, a meaningful event and one that could tap into some reinsurance capital.
It’s also the quantum of loss where some erosion of aggregate deductibles might be expected, potentially including for any exposed catastrophe bonds that provide aggregate reinsurance to the large primary carriers with policy concentrations in the impacted region.
Aon’s ranking of the top-10 severe weather insured loss events in the United States can be seen below:
To rank in this list, this week’s SCS and severe weather will need to cause an insurance market loss greater than $4.9 billion.
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