The frequency and intensity of severe convective storm events have increased sharply, pushing insured losses into the tens of billions globally. A recent Allianz report says these risks can still be reduced, though it will take a mix of traditional resilience measures and newer AI-driven tools.
In 2025 alone, severe convective storms accounted for nearly half of all insured natural catastrophe losses, at more than $60 bn. From 2023 through 2025, total losses from these events exceeded $200 bn.
The US remains the main hotspot for severe convective storm risk, generating more than 80% of global insured loss value. That fits with a broader pattern, natural catastrophes keep ranking among the leading business risks in the Allianz Risk Barometer.
Allianz identified hailstorms as the biggest driver of severe convective storm losses, estimating they account for 50% to 80% of all claims. That is the pressure point. It’s not marginal anymore.
The US leads globally in hail-related claims, though Allianz Commercial says other regions have also seen meaningful damage from hailstorms. The exposure is wider than people tend to assume.
According to Beinsure analysts, hail has shifted from a recurring nuisance into a capital-relevant loss driver for insurers, reinsurers, and asset-heavy businesses. Losses keep stacking, and the old secondary-peril label looks weaker every year.
Allianz says resilience against this risk needs to move higher on the agenda for any company with exposed assets in high-risk areas. Standard scenario planning no longer looks sufficient on its own.
The report argues that AI-based approaches can identify physical vulnerabilities in advance and support earlier, more targeted mitigation.
Thomas Lillelund, chief executive of Allianz Commercial, said severe convective storms are still often treated as a secondary peril, even though their cumulative losses now rival and sometimes exceed those from primary perils such as hurricanes. He said businesses need to reassess exposure and strengthen operational resilience through proactive measures grounded in local risk conditions.
Exposure has also grown because more people and more assets are moving into hazard-prone areas. Rapid urbanisation, ageing infrastructure, older buildings, and weak building codes all raise the value and severity of losses.
These storms do not always last long and usually hit limited areas. Still, when they strike densely populated regions, the economic and insured losses can be heavy.
Some of the most expensive hail-related claims come from damage to aircraft, commercial buildings, manufacturing plants, and renewable energy assets, including solar panels. Claim severity also rises when inflation pushes up repair and rebuild costs or when labour and material shortages slow recovery.
Scenario analysis remains central to climate risk assessment and resilience planning. Allianz says organisations no longer need to wait for major storm losses before acting.
With AI-supported insight, they can identify vulnerabilities in roofs, facades, equipment, and other exposed assets, then prioritise upgrades meant to reduce future damage.
This kind of forward-looking analysis helps businesses understand how different climate paths may affect assets, operations, and performance. It can also reveal hidden weak points and tipping points that traditional approaches often miss.
Allianz says this improves decision-making by allowing companies to test adaptation options, focus spending more precisely, and build strategies designed to hold up under different future conditions.
Michael Bruch, global head of risk advisory consulting services at Allianz Commercial, said traditional catastrophe models have struggled to capture property-specific risk details such as roof type, asset value, or the cumulative effect of hail on building envelopes.
Traditional catastrophe models have long struggled to capture property-specific risk factors, such as roof type and asset value, or the cumulative effects of hazards like hail on building envelopes
Michael Bruch, Allianz Commercial
He added that as AI becomes more embedded in core risk processes, its biggest value for customers will come from supporting smarter and more evidence-based resilience strategies that adjust to changing weather patterns instead of leaning on historical norms.
In his view, a data- and AI-driven risk management model is where this is heading, and companies will need it if they want to perform in a more volatile climate environment.
