With a preliminary insured loss estimate ranging from $4 billion to $7 billion for the severe weather events across the U.S. between May 14 and 20, Gallagher Re’s Chief Science Officer and Meteorologist, Steve Bowen, has argued that it’s well beyond time to abandon the semantic classification of severe convective storms (SCS) as a “secondary peril” within the U.S. insurance market.
In a newly released report analysing two deadly severe weather outbreaks spanning May 14–17 and May 18–20 across the central and eastern United States, Gallagher Re estimates that primary insurance carriers could face gross losses in the $4 billion to $7 billion range. This figure remains preliminary and subject to revision.
The reinsurer has indicated that the total economic impact is expected to rise further.
However, due to the high volume of claims stemming from wind and hail-related damage, a significant portion of the losses is anticipated to be covered by standard insurance policies.
“The hardest-hit areas saw considerable damage to homes, commercial assets, automobiles, and agriculture in populated areas of the Midwest / Upper Midwest, Mid-South, and Plains. Property damage costs associated with a confirmed EF3 tornado in the St. Louis, Missouri metro region alone were estimated by city officials at $1.6 billion,” Gallagher Re added.
The firm continued, “The highly active seven-day stretch in mid-May followed a relatively benign period for the month in the US. The limited thunderstorm activity in early May was aided by an anomalous blocking (or stuck) weather pattern, which brought relatively cool and dry northwest flow to the Plains, limiting widespread hazards and severe regional outbreaks. The recent lull followed what was otherwise another active start to the year for the peril.”
Gallagher Re’s report stated that through Q1, insurers faced SCS-related losses topping $11 billion, which is the third-costliest Q1 for US SCS on record.
In fact, 2025 ranked as the fifth-costliest year for US SCS insured losses on record through April, only behind 2023, 2011, 2024, and 2020.
Gallagher Re’s report went on, “Recent storm activity in May will officially push the US peril in 2025 beyond the $20 billion threshold and will mark the 8th time in the last 9 years to have passed that value annually on a nominal basis.
“The last year that did not top $20 billion in insured losses for US SCS on an adjusted basis was 2015 ($18 billion). The current 2025 total is now near the YTD 5-year average ($25 billion) and above the YTD 10-year average ($19 billion).
“This further shows how convective storms are continuing to drive greater aggregate losses for the industry. The combination of a much larger population and housing unit exposure in high-risk areas, plus more consistent impacts from large hail, straight-line winds, and tornadic activity, are the primary factors of why SCS losses continue to accelerate.
“There have now been eight individual billion-dollar US SCS insured loss events thus far in 2025 through May 20. This compares to recent year totals through the end of May in 2024 (13), 2023 (11), 2022 (6), 2021 (6), and 2020 (12).”
Aforementioned Steve Bowen commented, “We’ve long passed the point of justifying any semantic categorisation that considers SCS to be a “secondary” peril for the US insurance market. This has proven itself to be a perennial major loss driver for many insurance carriers.
“Combined with the considerable wildfire losses from January, the US heads toward the start of the Atlantic hurricane season with insurance industry losses already beyond $60 billion for the year. Reinsurers, however, remain very well capitalised and in a position to absorb sizeable natural catastrophe losses should they arise in the months to come.”
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