Hail, tornadoes and flash floods
Risks from severe thunderstorms on the rise
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Losses caused by severe thunderstorms have virtually skyrocketed since the early 2000s. These storms are often accompanied by hail, gale-force winds, tornadoes or heavy precipitation, resulting in flash floods, destroyed roofs, and flooding. Losses can quickly run into the billions. Insurers would be well advised to have a firm grasp of the attendant risks. After all, in industrialised countries, many thunderstorm-related losses, e.g. from hail damage, are covered by insurance.
The figures speak for themselves, as even adjusted for inflation, the rapid rise in losses is dramatic: in the ten years from 2000 onwards, severe thunderstorms caused average global losses of around US$ 13bn. In the past ten years, in contrast, the inflation-adjusted average was US$ 56bn.
~US$ 1,060bn
Losses caused by severe thunderstorms worldwide 1980-2025
(adjusted for inflation, including >70% in the US)
The vast majority of thunderstorm losses occur in the US. Alongside hurricanes, severe thunderstorms are the most important storm risk for the US insurance industry, and an enormous driver of overall economic losses. When a tornado or violent hailstorm strikes the centre of a major city, it can result in extremely high individual losses. On average, total losses were recently well into the two-digit billion range per year.
In 2025 alone, thunderstorms in the US were responsible for more than US$ 50bn in losses, around three-fourths of which were insured. This means that supposedly smaller, regionally limited events such as thunderstorms cumulatively caused losses on par with those from an extremely destructive hurricane.
In the US, geographic aspects are conducive to thunderstorm formation: east of the Rocky Mountains, there’s nothing to stop cold fronts from travelling south along “Tornado Alley”, as 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 also on the rise in Europe. In 2023, losses from severe thunderstorms in European countries reached a record US$ 16bn (inflation-adjusted), of which US$ 12bn were insured. These losses were especially due to thunderstorms in the Alps and over the Mediterranean. In northern Italy, a severe thunderstorm produced hailstones measuring up to 19 cm in diameter, causing enormous damage. After years of ever-increasing storm losses, the past two years have actually been less costly.
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 any 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 losses. 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. A large proportion of losses is often caused by vehicles, which are highly susceptible to hail damage. Further, hailstones with a diameter of 8 cm or more can even be deadly.
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 declines or low water-absorption capacities due to areas with sealed surfaces or that are 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 most powerful storms in the world. Although highly localised, these wind systems with the highest wind speeds leave a trail of destruction in their wake. They are created by extremely powerful storm cells.
At a tornado’s edges, wind speeds can reach up to 500 km/h. The average width of the funnel is around 100 m and the average trail is a few kilometres long, although widths of more than 1,000 m and trails up to 300 km long have also been observed. Worldwide, these storms chiefly occur in temperate regions such as the US, but also in smaller numbers in Central Europe, parts of South America and South Asia, eastern and southwestern Australia and southern Africa.
What makes tornadoes so dangerous is that they can form in a matter of minutes and, owing to their tremendous wind speeds, can be even more destructive than hurricanes on a localised scale. 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
In general, the loss trend for thunderstorms is already on the rise due to growing exposed values and repair costs. But as thunderstorms are now becoming more severe, the loss potential is increasing even more.
According to recent findings, the US will not see a general increase in the overall number of days on which especially severe thunderstorms with hail and tornadoes are likely to occur: there are regions with more frequent severe thunderstorms, but also areas where they are becoming less frequent. However, series of tornadoes with a large number of storms are also becoming more frequent. 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 – effects of climate change. Researchers are still debating whether climate change will also lead to more, or to more intense, hailstorms in the US. In general, it can be assumed that the more severe the thunderstorm, the greater the probability of large hailstones. At the same time, due to rising temperatures, hail melts more on its way to the surface. However, this also increases the average hailstone size on the ground, as the small hailstones in particular disappear, while the large ones are more likely to survive their journey.
According to a study conducted in collaboration with Munich Re, the “epicentre” of severe hailstorms in the US appears to be slowly shifting eastward. As there are more and larger urban centres there, the risk is increasing.
The intensity of thunderstorms has also increased in certain regions of Europe in recent years, with hailstorms the main factors driving losses. According to a further study, supported by Munich Re, the probability of severe hailstorms has increased significantly in many regions in recent decades – and the trend toward more frequent severe hailstorms is 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 substantially worse.
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