Overview of March 2025 Weather Event
From March 13-16, 2025, intense weather conditions across parts of the US led to numerous hazards. Preliminary assessments from reinsurance broker Gallagher Re estimate insured losses between $1-3 billion, marking it the year’s first billion-dollar severe convective storm (SCS) event.
Details and Impact
Steve Bowen, Chief Science Officer at Gallagher Re, explained that over 100 tornadoes have been confirmed, including 13 rated either EF3 (10) or EF4 (3). This event also included significant hail, damaging straight-line winds, flooding, and wildfires caused by intense non-convectively driven winds, resulting in notable physical damage.
The peak of the US SCS season (April through June) is approaching, and it is noteworthy that both 2023 and 2024 witnessed a record 10 separate multi-billion-dollar events.
Insurance and Economic Impact
Gallagher Re explained that most wind and hail-related damage affecting homes, businesses, vehicles, and agriculture across the Midwest, Southeast, and East Coast would typically be covered by standard insurance policies. Additional losses came from wildfires in Oklahoma and Kansas ignited by intense non-thunderstorm winds.
Before this event, the 2025 SCS season had been relatively quiet, with insured losses around $1 billion, significantly lower than the first three months of 2023 and 2024.
The rising financial cost of US severe thunderstorms has become a major topic in the insurance industry as underwriters seek to improve combined ratio performance with the peril.
Long-Term Trends
In a report, Gallagher Re noted that after a challenging 2023, US market combined ratios were showing improvement in 2024. The SCS peril has transitioned to a ‘new normal’ with annual nominal insured losses regularly exceeding $40 billion.
In 2024, the US endured a record-tying 10 multi-billion-dollar insured loss SCS events, matching 2023. 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 accounts for 50% to 80% of insured SCS losses in the US, recent events underscore the substantial impact of tornadoes and straight-line winds, especially in densely populated areas.
Socioeconomic and Climate Factors
Although climate change plays a role, the sharp increase in losses is primarily driven by socioeconomic factors, including urban expansion, a growing number of housing units, rising costs of construction materials and labour, inflation, and overall greater societal wealth.
Despite the NOAA Storm Prediction Center and local National Weather Service offices forecasting the outbreak nearly a week in advance, reports indicate that more than 40 people lost their lives in the recent severe weather events.
