Insured losses related to US severe convective storms (SCS) reached $42 billion in the first nine months of 2025, with average per-event costs 31% higher than the previous decade’s average, establishing a “new normal” for extreme weather, according to a recent Moody’s analysis.
SCS, characterised by winds exceeding 58 MPH, hail of at least one inch , and/or tornados, have become one of the most common and damaging natural catastrophes in the US.
Since 2020, cumulative insured losses from SCS have consistently exceeded those from hurricanes, forcing the insurance industry to urgently seek better ways to quantify and manage the risk.
This year, between January and September alone, the US experienced 39 SCS events, each averaging over $1 billion in insured losses.
To put this into perspective, re/insurers and brokers estimated total SCS losses for the full 12 months of 2024 to be between $51 billion and $57 billion. This means that the nine month 2025 total is not far off the 12 month total seen last year.
While estimates vary by firm, they confirm the high-loss trend. Gallagher Re pegs US-specific losses for Q1-Q3 even higher at $61 billion, while Aon’s Q3 report places total global insured losses from SCS at $57 billion – the third highest total on record.
The surge in SCS losses has been driven not only by weather patterns, but also by expanding urban exposure – urban/suburban areas in the US have expanded by 20% since 2000, creating a larger “bullseye” for storm impacts –, as well as rising raw material costs and social inflation.
Historically, SCS events have been difficult to model because they are highly localised, frequent, and lack consistent historical data.
Without a reliable model, insurers have largely managed this risk exposure by pulling back coverage, destabilising the market.
To address this, Moody’s is launching its North American SCS HD model this December. Developed in collaboration with the insurance industry, this model features detailed claims data, high-resolution radar data and explicit derecho modelling, dynamic roof methodology, and post-event loss amplification (PLA) features.
Julie Serakos, Managing Director, Model Product Management, Moody’s, commented: “Modelling severe convective storms – which have caused, on average, over $45 billion in U.S. insured losses over the last five years – has long been plagued by computational challenges and unreliable, highly-localized hazard data.
“Moody’s new HD SCS model breaks through those barriers, giving insurers sharper, more dependable risk insights that will help enhance coverage and stabilize markets.”
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