Impact of Severe Weather in March 2025
Between March 13th and 16th, 2025, harsh weather conditions wreaked havoc across various regions in the United States, resulting in significant damage and loss. According to initial evaluations conducted by the reinsurance broker Gallagher Re, the insured losses are projected to fall between $1-3 billion, marking the first billion-dollar severe convective storm (SCS) event of the year.
Tornadoes and Other Weather Phenomena
Steve Bowen, Chief Science Officer at Gallagher Re, emphasized the scale of the devastation, noting that over 100 tornadoes have been confirmed, including 13 rated at either EF3 (10) or EF4 (3). The storms also unleashed significant hail, destructive straight-line winds, flooding, and wildfires that were ignited by exceptionally strong non-convectively driven winds, all contributing to considerable physical damage.
Approaching Peak Season
As the peak of the US SCS season—spanning April to June—approaches, it is noteworthy that both 2023 and 2024 witnessed a record 10 separate multi-billion-dollar events.
Gallagher Re detailed that the bulk of wind and hail-related damage, which impacted homes, businesses, vehicles, and agriculture primarily across the Midwest, Southeast, and East Coast, is generally covered by standard insurance policies. Additional losses were reported due to wildfires in Oklahoma and Kansas, fueled by intense non-thunderstorm winds.
Previous Seasons and Financial Implications
Prior to this event, the 2025 SCS season had been relatively calm, with insured losses amounting to around $1 billion, a stark contrast to the higher figures recorded during the first quarter of 2023 and 2024.
Gallagher Re highlighted, “The escalating financial burden of US severe thunderstorms has become a crucial talking point in the insurance sector, as underwriters aim to enhance combined ratio performance with the peril.”
In a recent report, the broker remarked that after a challenging 2023, US market combined ratios showed improvement in 2024. “The SCS threat has evolved to a ‘new normal’ where annual nominal insured losses now frequently exceed $40 billion. In 2024, the US experienced a record-tying 10 multi-billion-dollar insured loss SCS events, paralleling 2023.”
Economic and Climatic Factors
Over the past two seasons (2023-2024), insured losses have surpassed $123 billion, with $65 billion recorded in 2023—a record high—and $58 billion in 2024, adjusted for inflation. While large hail typically comprises 50% to 80% of insured SCS losses in the US, recent events highlight the substantial impact of tornadoes and straight-line winds, especially in densely populated regions.
Although climate change plays a role, the sharp rise in losses is chiefly driven by socioeconomic factors, including urban expansion, a growing number of housing units, escalating costs of construction materials and labor, inflation, and overall increased societal wealth.
Tragic Loss of Life
Despite forecasts from the NOAA Storm Prediction Center and local National Weather Service offices predicting the outbreak nearly a week in advance, reports indicate that over 40 people lost their lives in the recent severe weather episodes.
