US thunderstorm property losses as high as from hurricanes

The risk to US property from thunderstorms is as high as from hurricanes, according to a Willis Re report.

The report 'Managing Severe Thunderstorm Risk' claims that the average annual loss from severe convective storms (SCS) was $11.23 billion, compared with $11.28 billion from hurricanes for the period 2003 to 2015. Over the past ten years, SCS was the largest annual aggregated risk peril to the US insurance industry.

In addition, the report points out that SCS frequency in the US is higher following La Niña, and lower following El Niño.

"Regional variability in increased or reduced severe convective storm frequency due to the El Niño-Southern Oscillation (ENSO) phase can have a significant impact on regional and single state property insurance companies," said Prasad Gunturi, executive vice-president of Willis Re.

"In collaboration with Columbia University, we are working to develop a climate conditioned severe convective storm event set for portfolio probabilistic loss estimates. We hope the climate conditioned view of risk can help companies understand, manage and mitigate the regional and year over year variability in severe convective storm losses."

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