From March 13-16, 2025, intense weather conditions across parts of the US led to numerous hazards, with preliminary assessments from reinsurance broker Gallagher Re estimating insured losses between $1-3 billion, making it the year’s first billion-dollar severe convective storm (SCS) event.
Steve Bowen, Chief Science Officer at Gallagher Re, explained that over “100 tornadoes have now been confirmed – including 13 rated either EF3 (10) or EF4 (3). Significant hail, damaging straight-line winds, flooding, and wildfires spawned from very intense non-convectively driven winds all led to notable physical damage impacts.”
With the peak of the US SCS season (April through June) approaching, it is notable that both 2023 and 2024 saw a record 10 separate multi-billion-dollar events.
Gallagher Re explained that most wind and hail-related damage—affecting homes, businesses, vehicles, and agriculture across the Midwest, Southeast, and East Coast—would typically be covered by standard insurance policies, while additional losses stemmed from wildfires in Oklahoma and Kansas ignited by intense non-thunderstorm winds.
Before this event, the 2025 SCS season had been relatively quiet, with insured losses totaling around $1 billion—significantly lower than the figures recorded in the first three months of 2023 and 2024.
Gallagher Re confirmed, “The rising financial cost of US severe thunderstorms has become a major topic of conversation in the insurance industry as underwriters seek to improve combined ratio performance with the peril.”
In a report, the broker noted that following a difficult 2023, US market combined ratios were showing improvement in 2024. “The SCS peril has transitioned to a ‘new normal’ in which annual nominal insured losses are now regularly exceeding $40 billion. In 2024, the US endured a record-tying 10 multi-billion-dollar insured loss SCS events (tied with 2023).”
Over the past two seasons (2023-2024), insured losses have surpassed $123 billion, with $65 billion recorded in 2023—a record high—and $58 billion in 2024, adjusted for inflation. While large hail typically accounts for 50% to 80% of insured SCS losses in the US, recent events underscore the substantial impact of tornadoes and straight-line winds, particularly in densely populated areas.
Although climate change plays a role, the sharp increase in losses is primarily driven by socioeconomic factors, including urban expansion, a growing number of housing units, rising costs of construction materials and labour, inflation, and overall greater societal wealth.
Despite the NOAA Storm Prediction Center and local National Weather Service offices forecasting the outbreak nearly a week in advance, reports indicate that more than 40 people lost their lives in the recent severe weather events.
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