There has been a huge leap in the insured costs of severe convective storm (SCS) across the United States.

Analysis by Moody’s found that insured losses from the storms up to and including September 2025 have already reached $42 billion, with average per-event costs 31% higher than the previous decade’s average.

The company added: “One of the most common and damaging natural catastrophes in the U.S., severe convective storms produce one or more of the following – damaging winds of 58 mph or more, hail of at least 1-inch diameter, and a tornado.

“With SCS insured losses significantly outpacing those from hurricanes since 2020, the insurance industry is searching for ways to transform how it understands, quantifies, and manages this escalating risk – including through transparent and granular solutions such as Moody’s North American SCS HD model, launching this December.”

The analysis found:

• January-September 2025 saw 39 SCS events, with an average of over $1 billion in insured losses per event.
• The surge in SCS losses is driven by factors such as expanding urban exposure – urban/suburban area in the U.S. has expanded by 20% since 2000, creating a larger “bullseye” for storm impacts – as well as rising raw material costs and social inflation.
• SCS events are highly localized, frequent, and lack consistent historical data, making them difficult to model with legacy approaches. Without a reliable model, insurers have largely managed this risk exposure by pulling back coverage.
• Moody’s model – including detailed claims data, high-resolution radar data and explicit derecho modeling, dynamic roof methodology, and post-event loss amplification (PLA) features – was developed in collaboration with the insurance industry and will aid it in providing better coverage options, bringing more capital back into a better-stabilized market.

Julie Serakos, managing director, Model Product Management, Moody’s, said: “Modelling severe convective storms – which have caused, on average, over $45 billion in U.S. insured losses over the last five years – has long been plagued by computational challenges and unreliable, highly-localised hazard data. Moody’s new HD SCS model breaks through those barriers, giving insurers sharper, more dependable risk insights that will help enhance coverage and stabilise markets.”