Severe convective storm (SCS) losses in the US continued to dominate global insured losses in 2024, following a highly active period for the peril in late April and May. US SCS accounted for 61% of global insured losses during the first six months of 2024, according to Gallagher Re’s report about Natural Catastrophe and Climate. Beinsure Media selected the most important highlights from the report..
Even more remarkable, when combining insured US SCS losses during the past 18 months (FY 2023 and H1 2024), we have officially topped $100 bn. This is a staggering sum and the costliest two-year stretch ever recorded for the peril.
For context, this threshold has only been breached twice on the US mainland for the tropical cyclone peril (2004/2005: $179 bn and 2020/2021: $105 bn).
The hail sub-peril continues to drive a sizeable portion of thunderstorm-related losses for insurers on an annual basis. KCC estimates that the insured loss from SCS outbreak will be close to $5.5 bn. The KCC loss estimate includesthe privately insured damage.
Thunderstorm-related losses for insurers
- Preliminary: H1 economic losses at $48 bn with insurers covering $37 bn of the total
- Second-costliest Insured H1 on record behind 2023 ($47 bn): Third was 2011 ($36 bn)
- Costliest outbreaks: Mar 12–17, May 6–10, and May 17–22
- ~1,300 tornado reports in H1: 1,064+ have been confirmed, including 34 rated EF3 (31) or EF4 (3)
There has been a major emphasis on US SCS activity as it is continuing to bring significant challenges to primary insurance carriers, with losses staying highly elevated (see Worldwide Severe Convective Storms: Listing of Global Events & Economic Loss).
With the reduction in aggregate coverage availability from reinsurance or the high cost to obtain such coverage, this has resulted in increased direct loss costs for insurers that have eroded underwriting performance and quarterly earnings.
The drivers for these increased losses include inflation, the rising costs of supplies and repairs, expanding urban footprints in SCS-prone regions, and aging US housing stock.
While there are currently limited signals in overall increased SCS frequency or intensity, future climate scenarios do show spatial and/or temporal shifts in activity.
This includes a southward and eastward shift in SCS activity, an anticipated earlier start to the season, and an increasing trend in the number of days with conditions favorable for SCS outbreaks.
Risk-adjusted rates on most programs were either flat or down by as much as 10%. However, market softening primarily occurred early in the renewal cycle as reinsurers were more eager to increase their capacity.
This started to change as the calendar got closer to June 1 and more ominous Atlantic hurricane season forecasts were released by NOAA, CSU, and other agencies.
Weather Event Statistics and Forecast for 2024
BMS has released a severe weather update indicating that insurance losses could reach nearly $20 bn by the end of May 2024.
BMS warned the insurance industry to brace for a harsh severe weather season in the U.S.
Since April, losses have escalated due to major events, such as severe thunderstorms in Dallas and a derecho in Houston, leaving over 2.07 mn Texans without power (see Severe Thunderstorms the Main Driver for Insured NatCat losses). The recent events add uncertainty to the loss projections. Based on past occurrences, these events will likely result in several billion dollars in damages.
The table below presents the forecasted and historical data for tornadoes, hail (>1″), large hail (>2″), and wind (>58 mph) from 2024 to decadal and long-term averages.
Comparative H1 storm statistic
| Timeframe | Tornadoes | Hail (>1″) | Large Hail (>2″) | Wind (>58 mph) |
| 2024F | 6,971 | 450 | 4,285 | 831 |
| 2023 | 8,591 | 525 | 4,601 | 788 |
| Decadal H1 Avg | 7,752 | 729 | 4,552 | 938 |
| 1990-2023 H1 Avg | 9,485 | 681 | 4,170 | 1,238 |
Key Insights
- Tornadoes: The forecast for 2024 shows a significant decrease to 6,971 compared to 8,591 in 2023.
- Hail (>1″): Predicted to decline to 450 in 2024 from 525 in 2023.
- Large Hail (>2″): Expected to decrease to 4,285 in 2024, down from 4,601 in 2023.
- Wind (>58 mph): Forecasted to increase slightly to 831 in 2024 from 788 in 2023, but still lower than long-term averages.
Map of H1 tornadoes
Map of H1 hail swaths of at least 1.5 inches
H1 economic losses were tentatively tallied at least $48 bn with insurers covering roughly $37 bn of the total.
2024 already ranks in the top 4 costliest insured SCS years on record, behind 2023 ($63 bn), 2020 ($45 bn), and 2011 ($41 bn)
The US had experienced 12 bn-dollar-plus insured SCS loss events in H1, of which eight saw multi-bn-dollar industry loss totals ($2+ bn). Multiple other events were just below the multi-bn threshold. Further loss progression will continue in the months ahead.
The US recorded well above the most recent decadal average for local storm reports (LSRs) of tornadoes, large hail (≥2 inches or larger), and damaging straight-line winds.
The large hail reports included swaths that tracked through parts of highly populated metro areas and were a significant driver of the loss of damage. This data comes via NOAA’s Storm Prediction Center (SPC).
The most prolific activity came in Q2, especially during an exceptionally active period from late April through May.
The pattern featured favorable jet-stream winds which aided in deepening a succession of low-pressure systems across the central and eastern US. Near-daily outbreaks of SCS occurred when these systems and their associated frontal boundaries interacted with clashing air masses as warm and moist air was transported northward from the Gulf of Mexico.
Preliminary data from NOAA showed that as many as 571 tornadoes were recorded in May alone. If all were confirmed, this would surpass the previous record of 550 set in May 2003. The May 2024 total was more than double the climatological average (1991–2020).
Insured costs associated with the US SCS peril
The insured costs associated with the US SCS peril have continued to drive a greater portion of annual losses in recent years. This is putting tremendous strain on national and regional primary insurance carriers who are increasingly forced to absorb most, if not all, of their claims payouts, given that a very small portion of losses are being ceded to reinsurance.
Higher reinsurance premium costs to obtain aggregate covers mean insurers pay more for the same or less coverage.
As primary insurer losses rise and quarterly earnings are impacted, this is now leading to higher premiums being felt by residential policyholders. These higher reinsurance costs are driving the bulk of premium rate rises seen across all 50 US states in recent years.
US SCS: Costliest Insured Loss Years
US SCS: Insured Loss Average Per Event
This included two destructive EF4 tornadoes which touched down near Barnsdall, Oklahoma, and Greenfield, Iowa.
In H1, the US recorded 34 tornadoes rated EF3 (31) or EF4 (3). This was already higher than the full year decadal average of 24 such twisters.
Hail-related damage continued to drive substantial losses for insurers. Both the Dallas Metroplex (May 27) and Denver Metro region (May 30) saw bn-dollar industry hail losses.
The event near Denver saw hail accumulating like snow, with some hailstones reaching 2.75 inches (7 centimeters) in diameter. This was among the largest hail to impact the metro region in decades. Costly hail swaths likewise impacted populated regions near St. Louis and the Chicago suburbs in May.
On June 2, a hailstone in Swisher County, Texas near Virgo Park exceeded 6.0 inches (15.2 centimeters) in diameter, potentially challenging the state record hailstone (6.4 inches/16.3 centimeters) which fell in the town of Hondo in 2021.
The Houston Derecho on May 16 was a reminder of the magnitude of damage that can be generated by non-tornadic winds, especially when they impact a highly urbanized and densely populated region.
Wind gusts in Houston and surrounding communities during the event peaked at 100 mph (160 kph), equivalent to those seen in a strong Category 2 hurricane.
Costly damage was incurred to residential and commercial properties, including several large skyscrapers that had a considerable volume of windows shattered or broken.
More than one mn customers lost power during the event, and extended outages were particularly concerning for vulnerable populations as multiple days of warm temperatures followed the storms.
FAQ
Severe convective storms (SCS) are intense weather events, including thunderstorms, tornadoes, and hailstorms, that can cause significant damage. In the US, these storms are the leading cause of insured losses, with SCS losses accounting for 61% of global insured losses in the first half of 2024.
In the past 18 months, US SCS losses have surpassed $100 bn, making it the costliest two-year stretch for this peril. Insured losses in H1 2024 alone reached $37 bn out of a total of $48 bn in economic losses.
Hail is a significant driver of thunderstorm-related losses, contributing heavily to annual damages. In 2024, hail-related events in Dallas and Denver resulted in industry losses exceeding $1 bn each.
The increasing frequency and intensity of SCS events, coupled with rising costs for supplies and repairs, have led to higher direct loss costs for insurers. This, in turn, has impacted underwriting performance and raised premiums for policyholders.
Severe convective storms (SCS) are intense weather events, including thunderstorms, tornadoes, and hailstorms, that can cause significant damage. In the US, these storms are the leading cause of insured losses, with SCS losses accounting for 61% of global insured losses in the first half of 2024.
In the past 18 months, US SCS losses have surpassed $100 bn, making it the costliest two-year stretch for this peril. Insured losses in H1 2024 alone reached $37 bn out of a total of $48 bn in economic losses.
Hail is a significant driver of thunderstorm-related losses, contributing heavily to annual damages. In 2024, hail-related events in Dallas and Denver resulted in industry losses exceeding $1 bn each.
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AUTHORS: Steve Bowen – Chief Science Officer at Gallagher Re, Brian Kerschner – Western Hemisphere Meteorologist at Gallagher Re, Jin Zheng Ng – Eastern Hemisphere Meteorologist at Gallagher Re
