Insured losses from severe convective storms in the US hit $42 bn in 9M 2025. Moody’s says the jump in per event costs, now running 31% above the prior decade’s average, shows the country has entered a new normal for destructive weather.
Between January and September 2025, the US logged 39 severe convective storms, each clearing the $1 bn mark.
That pace nearly matches the full year 2024 total, when the industry estimated SCS losses between $51 bn and $57 bn. 9M into 2025, the market is already closing in on those numbers.
According to Beinsure, SCS inflicted $58 bn in insured losses in 2024, surpassing hurricanes and ranking as the second-costliest year on record for these events.
Roof damage accounted for as much as 90% of residential catastrophe losses, data from the Insurance Institute for Business & Home Safety shows.
Property-level insights allow carriers to proactively address known vulnerabilities, improve underwriting precision, and work with homeowners to reduce losses before they happen.
Estimates differ by firm, but all agree the trend is steep. Gallagher Re places Q1–Q3 2025 US losses at $61bn. Aon’s Q3 tally pins global SCS losses at $57bn, the third highest on record.
The drivers go beyond meteorology. Urban and suburban zones have sprawled 20% since 2000, widening the bullseye for storm damage. Material costs keep climbing.
Social inflation pushes claims higher. Put together, they magnify every storm that hits populated corridors.
SCS losses remain hard to model. The storms are hyper local, frequent, and inconsistent across historical datasets, leaving carriers with limited tools.
Without strong models, many insurers pull back coverage, raising volatility in the market and narrowing options for homeowners.
In H1 2025, the homeowners direct incurred loss ratio reached 102.4%—the highest quarterly level since 2011. State Farm alone reported $6.57bn in direct incurred losses during that period, which could add up to 4 percentage points to the national homeowners combined ratio.
While a portion of these losses will be absorbed by offshore reinsurers, the financial burden and volatility remain significant for primary carriers.
The combination of rate increases, tighter policy terms, and reduced coverage availability has drawn public and political scrutiny, leading to policy discussions on insurance access and affordability.
Moody’s plans to change that. In December, it will launch its North American SCS HD model, built with industry partners.
The model blends detailed claims data, high resolution radar inputs, explicit derecho simulation, a dynamic roof damage methodology, and post event loss amplification factors.
Julie Serakos, managing director of model product management at Moody’s, said modelling SCS has been hampered for years by computational strain and patchy hazard data.
She said the new model confronts both problems head on, offering a clearer picture of a peril that has averaged more than $45bn in insured losses annually over the past five years.
SCS events – storms with winds above 58 mph, hail at least an inch across, or tornados – have grown into the most frequent and damaging natural catastrophes in the US.
Since 2020, they’ve produced more insured losses than hurricanes, a shift that’s forcing insurers to rethink how they quantify and price the risk.
