Insured losses from severe convective storms in the U.S. reached $42 bn through the first nine months of 2025, according to Moody’s. The firm says per-event costs now run 31% above the prior decade’s average, a sign the market has crossed into a tougher baseline for weather losses.
From January through September, the U.S. recorded 39 severe convective storms with losses above $1 bn each.
That pace almost mirrors the full-year count in 2024, when industry estimates placed SCS losses between $51 bn and $57 bn. With three months left in 2025, totals already crowd those levels.
According to Beinsure analysts, SCS events generated about $58 bn in insured losses in 2024, overtaking hurricanes and marking the second-costliest year on record for this peril. The order surprised few carriers. The scale did.
Roof damage drives most of the pain. Data from the Insurance Institute for Business & Home Safety shows roofs accounted for as much as 90% of residential catastrophe losses tied to convective storms. That concentration explains why underwriting teams keep circling construction quality and mitigation.
Property-level data changes the conversation. It lets insurers flag known weak points, sharpen risk selection, and work directly with homeowners before storms hit.
Prevention costs less than repair. Everyone knows it. Execution lags.
Loss estimates vary by firm, though direction stays consistent. Gallagher Re pegs U.S. SCS losses for Q1 through Q3 2025 at $61 bn. Aon’s third-quarter view places global SCS losses at $57 bn, the third-highest total on record. Different scopes. Same message.
Weather alone doesn’t explain it. Urban and suburban development expanded about 20% since 2000, placing more property in harm’s way. Construction and material costs continue to rise. Social inflation lifts claim settlements. Stack those forces together and each storm hits harder than the last.
SCS remains notoriously difficult to model. The events are local, frequent, and uneven across historical records. That leaves carriers with thin guidance and wide error bands.
Without credible models, some insurers retreat. Coverage tightens. Volatility increases. Homeowners feel it first.
In the first half of 2025, the homeowners direct incurred loss ratio reached 102.4%, the highest quarterly level since 2011. State Farm alone reported $6.57 bn in direct incurred losses during that period, a figure that could add up to 4 percentage points to the national homeowners combined ratio.
Reinsurers offshore will absorb part of the hit, though primary carriers still carry the volatility. Balance sheets wobble. Pricing follows.
Rate hikes, tighter terms, and shrinking availability now attract public and political attention, pushing insurance access and affordability into policy debates. Pressure builds from all sides.
Moody’s says better tools are coming. In December, it plans to launch its North American SCS HD model, developed with industry partners.
The model combines detailed claims data, high-resolution radar, explicit derecho simulation, dynamic roof damage logic, and post-event loss amplification factors. It aims to narrow uncertainty where guesswork ruled.
Julie Serakos, managing director of model product management at Moody’s, said SCS modelling stalled for years due to computing limits and fragmented hazard data. Those barriers eased. The losses didn’t.
