Steve Bowen, Chief Science Officer at reinsurance broker Gallagher Re, has suggested the total cost to the insurance industry from outbreaks of Severe Convective Storms (SCS) has likely surpassed $25 billion year-to-date.
Earlier this year, Gallagher Re released a report noting that Q1 saw more than $10 billion of convective storm insured losses, as “secondary perils” again made up the bulk of the quarterly loss burden.
In Q2, severe weather has continued across the United States, with Allstate recently announcing that total catastrophe losses for April and May combined were $1.68 billion, pre-tax, with approximately 70% of the losses in May related to two wind and hail events.
Meanwhile, based on its high-resolution SCS Reference Model, Karen Clark & Company has estimated that the insured loss from the SCS outbreak between June 10th and 19th in the US will be close to $5.5 billion.
The catastrophe modeller noted that dozens of instances of softball-sized hail were reported across Texas, Arkansas, Mississippi, and Georgia and extreme wind gusts exceeding hurricane force were measured throughout the South.
While hail and winds were the dominant features of this event, several damaging tornadoes also formed.
According to Gallagher Re’s Bowen, SCS insured losses for the first half of 2023 are already likely to be in the top-three H1s ever recorded, highlighting the intensity of this year’s convective weather and related perils.
For the full year 2022, the reinsurer reported that convective storm-related losses globally had reached $39 billion, the eighth year since 2010 where they have topped $20 billion.
With this in mind, 2023 is already the ninth year to top $20 billion in SCS insured losses.