This blog post examines the sharp rise in insured losses from U.S. severe convective storms (SCS) through September 2025, the implications for insurers and policyholders, and how the insurance industry is responding.
Drawing on recent industry data and market observations, I explain why tornadoes, hail, straight-line winds and derechos are now the dominant natural catastrophe risk in the United States and what that means for risk transfer, pricing and resilience strategies.
Scale of the problem: SCS losses through September 2025
Severe convective storms have emerged as the most frequent and costly natural catastrophe in the U.S., overtaking hurricanes since 2020.
The combination of more frequent damaging events, broader geographic reach and rising claims severity has created a persistent challenge for insurers and communities alike.
Key statistics and trends
Insured losses from SCS reached $42 billion through September 2025, according to Moody’s.
Per-event costs are averaging 31% higher than the previous decade.
From January to September 2025 the U.S. recorded 39 SCS events, each averaging over $1 billion in insured losses.
This highlights both frequency and severity escalation.
Why insured costs are rising
Several interrelated drivers are pushing insured losses higher: expanding exposure in urbanized areas, higher repair and replacement costs, and social inflation that amplifies claim payouts.
These forces combine to increase both the likelihood and the financial impact of each convective storm event.
Primary drivers at a glance
The following factors are central to the trend:
Implications for the insurance industry
Insurers view SCS as a top earnings threat.
In a 2025 industry survey, 87% of executives expressed concern about future losses.
The industry is struggling to balance coverage availability, affordable pricing and capital adequacy.
Risk transfer and capital management
Traditional reinsurance remains the primary risk-transfer mechanism, but market dynamics are shifting.
Higher attachment points in many reinsurance contracts mean primary insurers absorb more frequent, mid-sized losses — the very losses that now occur with greater regularity.
Carriers are exploring alternatives, including aggregate working-layer solutions that provide protection for accumulations of mid-sized events.
Some insurers are restricting coverage or increasing premiums where modeling and underwriting indicate concentrated exposure.
Modeling, analytics and resilience: the path forward
Modeling SCS risk is inherently difficult because these events are highly localized and unpredictable.
The industry is investing heavily in improved catastrophe models, hyper-local analytics and forward-looking exposure management to close gaps in understanding and pricing.
What insurers are doing now
Key industry responses include:
Here is the source article for this story: US severe storm losses set new benchmark as insurers turn to advanced modeling