Property insurers in the United States are grappling over how to manage the growing frequency and severity of losses tied to severe convective storms.
Once thought of as secondary perils, these storms — characterized by tornadoes, hail and straight-line winds (including derechos) — are now top-of-mind issues for insurers due to their astounding ability to cause catastrophic losses in short periods of time coupled with the increased frequency of these events.
In the first six months of 2024, severe convective storms caused $39 billion of insured losses in the U.S., according to Aon’s H1 2024 Global Catastrophe Recap, with four events in the central and southern U.S. generating insured losses totaling nearly $15 billion. This is a profound financial risk for insurers — especially for those operating in “Tornado Alley,” which includes Illinois, Indiana, Iowa, Kansas, Missouri, Nebraska, Ohio, Oklahoma, South Dakota and Texas — and it is growing ever more difficult to manage due to factors like climate change, economic growth, urbanization and higher repair costs.
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Troy Crawford
Troy Crawford is head of commercial lines product management at Westfield Insurance. Troy is based in Naples, Fla.
