Hail, tornadoes and flash floods
Risks from severe thunderstorms are on the rise
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~US$ 1,000bn
Losses caused by severe thunderstorms worldwide 1980-2024
(inflation-adjusted, >70% of which in the USA)
After hurricanes, thunderstorms are the most significant severe weather risk for the insurance sector in the USA. A tornado or violent hailstorm occurring in the centre of a major city can result in extremely high single losses. On average, total losses were recently well into the two-digit billion range per year. In 2024 alone, thunderstorms in the USA were responsible for around US$ 57bn in losses, more than two-thirds of which were insured. This means that supposedly smaller, regional-scale events like thunderstorms caused combined damage on the same scale as Hurricane Helene in 2024, the world’s costliest natural disaster of the year.
In the USA, geographic aspects are conducive to thunderstorms: east of the Rocky Mountains, there’s nothing to stop cold fronts from travelling south, since there are no mountain chains in the way. When these cold fronts collide with warm and moist air, it frequently produces severe outbreaks of thunderstorms, often accompanied by tornadoes and hail.
Losses caused by severe thunderstorms are on the rise in Europe, too. In 2023, losses from severe thunderstorms in European countries reached a record US$ 16bn (inflation-adjusted), of which US$ 12bn was insured. Thunderstorms in the Alpine region and in the Mediterranean area made a particular contribution. In northern Italy, hailstones measuring up to 19 cm were discovered during a heavy thunderstorm, causing enormous damage.
Flash floods, landslides and flooding — The perils of severe thunderstorms
Severe thunderstorms can occur virtually anywhere. And that is precisely why loss prevention is so challenging: it’s virtually impossible to predict exactly where a thunderstorm will form, with forecasts only possible shortly before the event. However, it is possible to identify areas that have a particularly high probability of thunderstorms and, as a result, a high probability of loss. In these regions, the loss potential can often run into the billions.
Buildings and infrastructure are particularly prone to losses as a result of severe hailstorms. Photovoltaic panels, building insulation and exterior window blinds are contributing to rising losses, which is why loss prevention measures are so crucial. Hailstones as small as 8 cm pose a danger to human life.
Heavy precipitation resulting from severe thunderstorms can also lead to substantial losses. How quickly, where, and on what scale heavy precipitation leads to flash floods and flooding depends on the respective catchment area. Factors like steep slopes or low water storage capacities due to areas that are sealed or covered with buildings increase the risk of flash floods after heavy precipitation.
In addition, when the soil is over-saturated following repeated downpours, landslides can occur on hillsides. When flotsam and jetsam clog up outlets like culverts, the water gathers before the obstacle - and when it breaks loose, the result can be a devastating flood wave.
Tornadoes in the USA
Tornadoes are the wind systems with the highest wind speeds, and leave paths of destruction in their wake. They occur in powerful storm cells.
At their edges, tornadoes’ wind speeds can reach up to 500 km/h. The average width of a tornado funnel is around 100 m and the average path is a few kilometres, although widths of more than 1,000 m and paths of up to 300 km have also been observed. Globally speaking, these storms predominantly form in regions with temperate climates, like the USA and, to a lesser extent, central Europe, central South America, parts of South Asia, East and Southwest Australia and in southern Africa.
Tornadoes are so dangerous because they can form in a matter of minutes and, owing to their highly localised extreme wind speeds, can be even more destructive than hurricanes. In the American Midwest, these storms frequently occur along the infamous Tornado Alley, which runs roughly parallel to the Rocky Mountains, from South Dakota and Iowa in the north to Texas in the south.
Thunderstorms and climate change
More frequent severe thunderstorms will further worsen the loss potential, which is already increasing due to higher asset values and repair costs.
According to research, the USA will not see an increase in the overall number of days on which especially severe thunderstorms with hail and tornadoes are likely to occur. However, there is a trend towards an increase in tornado series with a large number of storms. The risk of losses is rising.
Climate-model-based studies have concluded that increased atmospheric moisture is the motor of this change. In turn, the moisture is due to higher ocean temperatures and increased evaporation – an effect of climate change. Researchers are still debating whether climate change will also lead to more or heavier hailstorms in the USA. In general, it can be assumed that the more severe the thunderstorm, the greater the probability of large hailstones. The melting point in the atmosphere, however, is also continuing to rise, which in turn reduces the size of the hailstones.
The intensity of thunderstorms in certain regions of Europe has also increased in recent years, with hailstorms being the main factors driving losses. According to a study supported by Munich Re, the probability of severe hailstorms has already increased significantly in many regions in recent decades, with the trend towards more severe hailstorms set to continue. Even in a moderate climate scenario, the number of severe hailstorms will likely rise by 30% to 40% by the end of the century in nearly all parts of Europe. In northern Italy, the Balkans, and along the Mediterranean coasts of France and Spain, the increase could even be much more extreme.
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