Thunderstorm, tornado, wind and hail events increasingly costly for U.S. insurers: A&M Best

Losses stemming from thunderstorms, tornadoes, wind and hail are exerting pressure on U.S. property insurers’ results even before the industry has entered what is forecasted to be an active Atlantic hurricane season, A.M. Best reported.
Above-normal frequency and severity of thunderstorms, tornadoes and related weather events in recent years have led to more insurers experiencing aggregate losses that may have fallen short of reinsurance triggers, potentially pressuring operating results, A.M. best says in its special report, P/C Insurers Reeling Already with Hurricane Season Yet to Come.
Three hundred and five tornadoes touched down across several southern U.S. states between Apr. 25 and 28. Insured losses are estimated in the range of $2 billion to $5 billion, making it the industry’s costliest thunderstorm and tornado event.
Overall, preliminary figures show 1,042 tornadoes occurring in 2011 through April. This compares with a three-year average of 378 for the same four-month period from 2008 through 2010, A.M. Best reported.
In 2010, insured losses from natural perils in the U.S. set a record for years in which a hurricane did not make landfall. It also marked the third straight year the P&C industry suffered more than $9 billion in annual insured losses from severe thunderstorms and related weather events.
“Frequent severe thunderstorm and related weather events, such as tornadoes, wind and hail, have had a growing impact on P&C insurers’ results,” the report says. “More of these events have resulted in losses of $1 billion or more, particularly since 2006.”
Prior to 1994, there was only one such event. But between 1994 and 2009, the number of $1-billion-plus thunderstorm loss events surged to 17, three of which were in 2009 alone, A.M. Best reported.