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Guy Carpenter warns Midwest storms may drive billions in insured losses

The broker estimates insured losses could land in the billions, with peak gusts reported at 97 mph in Illinois and hail up to 3.5 inches.

Reported · Written up by our desk · Reinsurance

Reinsurance broker Guy Carpenter, part of Marsh, warned that a severe convective storm outbreak across the US Midwest from August 9 to 11 could generate insured losses running into the billions of dollars, based on initial damage reports.

Guy Carpenter said the storms formed as a slow-moving cold front affected Wisconsin, Illinois, Iowa, Indiana, Ohio and nearby states, with activity impacting major metropolitan areas including Chicago, Indianapolis and Columbus.

The broker highlighted wind and hail risk, noting a strongest reported gust of 97 mph in Sugar Grove, Illinois. It said multiple states saw damaging winds of 60 to 80-plus mph, hail reached 3.5 inches in diameter, and the outbreak also included isolated tornadoes and intense rainfall, with rates of 2 to 3 inches per hour and multi-day totals potentially above 9 inches.

Given the severity of winds in the Chicago, Indianapolis and Columbus, Ohio metropolitan areas, Guy Carpenter said insured losses are likely to be measured in the billions of dollars, and it added the event could rank among the 10 largest US severe convective storm insured loss events on record. It also cited Aon, saying a top-10 ranking would imply an industry insured loss of about $5 billion or more.

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