Severe thunderstorms, mainly in the US, accounted for 70% of the global insured losses. Balz Grollimund, Head of Catastrophe Perils at Swiss Re, commented: “In recent years, severe thunderstorms have emerged as a main driver of a significant increase in insured losses. This is due to growing populations and higher property values in urban areas, along with insured property being more vulnerable to hail damage. Therefore, multi-billion-dollar loss events from this peril are likely to become more common.”
Thunderstorms, or severe convective storms (SCS), tend to be characterised by severe winds, including the possibility of tornadoes, hail, and heavy rain. In the US, there were 12 storms which caused losses in excess of $1 billion. Swiss Re estimates that insured losses from SCS in the US have increased by over 8% in nominal terms annually since 2008, reaching $42 billion in the first half of 2024.
Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, said: “Insured losses from severe thunderstorms have been growing due to a mix of factors including inflation, which has contributed to rising construction costs. And, with economic development, overall exposures will continue to increase. That’s why investing in protective measures – such as shielding vulnerable communities from floods or improving building codes to protect homes from severe hailstorms – is vital.”
Floods also resulted in higher-than-average losses, driven by events in the UAE, Germany, and Brazil, which accounted for 14% of global insured losses. There were particularly stark costs associated with the flash floods which occurred in the Arabian Peninsula in April. At $2 billion, the insured losses will be the highest incurred by the UAE for a natural disaster on record.
Whilst heavy rainfall is expected to increase in a warmer climate, the human impact of rapid urban growth, land use alteration, limited drainage systems, and dry soils all intensify and increase loss severity.
