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Severe convective storms are becoming insurers biggest insured risk
A First Street analysis says 2025 severe convective storms drove about $82 billion in global economic losses, nearly one-third of all worldwide natural catastrophe losses.
Severe convective storms, including hail, damaging wind, and tornadoes, have emerged as the costliest insured peril of the 21st century and are forcing insurers and investors to rethink how they price climate risk, according to new research from First Street cited by Reinsurance News.
The report estimates that in 2025, severe convective storms generated about $82 billion in global economic losses, representing nearly one-third of all worldwide natural catastrophe losses, and it says cumulative insured losses from these storms have surpassed tropical cyclones for the first time.
First Street’s analysis maps where storm hazards intersect with dense populations and economic assets, framing severe convective storms as a portfolio level financial risk rather than a set of localized secondary perils.
The study finds exposure is concentrated across major economic corridors, with the Americas showing the highest relative shares, including 13.6% of regional GDP exposed annually to damaging wind and 11.2% exposed to hail, while Texas is identified as the largest hail exposed GDP concentration globally. In Asia Pacific, it estimates $10 trillion in GDP exposed to damaging wind and $4.3 trillion exposed to hail, and it projects climate change will accelerate damaging wind exposure expansion over the next 30 years, with the fastest increases in Asia Pacific beyond 18% and around 14% across Europe, the Middle East, and Africa.