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How to protect your organization from severe convective storm risks

June 13, 2024

Damage due to severe convective storms is becoming more common, with devastating effects. It is vital for businesses to identify the risks they face - and to take action to mitigate these exposures.
Climate|Property Risk and Insurance Solutions|Risk and Analytics

The bill for damage from convective storms has increased significantly over the past 20 years. [1] More organizations now need to analyze their exposure to risk and think carefully about how to respond.

Residents of Kansas City are used to bad weather – Kansas is in the center of “tornado alley”, the region of the US hit most often by tornadoes. But even they were shocked when hailstones the size of softballs [2] began falling from the sky in March, badly damaging property across the area.

$3bn Approximate insured losses in northern Italy caused by two unprecedented hailstone events.

The hail fell during a fierce convective storm – just one of many such storms already seen in the US this year. Indeed, weather specialists warn the country is now on target for a record level of convective storm activity [3] in 2024. Nor is the US the only country facing such severe weather. In July 2023, for example, northern Italy witnessed two unprecedented European hailstone records leading to approximately US $3 billion in insured losses. [1] Asia has also suffered. In China, for example, a series of storms [4] at the beginning of April caused at least seven deaths .

In fact, convective storms can happen almost anywhere in the world – and often cause hugely expensive damage, both to residential property and possessions, and to businesses.

For US businesses alone, insured losses have exceeded $50bn in the worst years. Assessing convective storm risk – and mitigating that risk if appropriate – is therefore crucial.[5]

What are convective storms?

Convective storms are intense atmospheric disturbances that can cause powerful winds, large hail, heavy rainfall and even tornadoes. They arise from specific atmospheric conditions, including atmospheric instability, latent heat release, air pressure differences, low-air pressure and wind shear.

Such conditions can arise all over the world. The most damaging storms, including tornadoes, are most common in the US, but Asia, Europe, Africa and Australia have all been hit too.

The most damaging storms, including tornadoes, are most common in the US, but Asia, Europe, Africa and Australia have all been hit too.”

Paul Ward | Head of Property and Casualty, WTW

And while meteorologists are getting better at predicting when and where storms will strike, accurate forecasts are difficult; convective storms are often very sudden and fast-moving – and while large areas may be at risk, the actual impact area is typically small.

One question often asked is whether a recent increase – particularly over the past two decades – in the number and frequency of convective storms worldwide is related to climate change. But while it may be a factor given that a warmer atmosphere can hold more moisture, the science is not definitive. [6]

To address this, the WTW Research Network, in collaboration with leading research institutions, is leveraging the latest modeling and remotely-sensed observations to better understand the recent changes in the frequency and severity of convective storms.

This advanced research is critical as it helps to refine our predictions and strategies for mitigating storm impacts.

Certainly, however, advances in technology mean more storms are now detected, including those striking sparsely populated areas.

And greater urbanization, a trend worldwide, puts more infrastructure and people in the way of storms, increasing our collective exposure and vulnerability. This makes it imperative to pay more attention – to think carefully about potential convective storm risk and how to manage it.

Quantifying convective storm risk

Powerful industry recognized catastrophe modeling tools make it possible, when working with specialists, to measure and quantify the potential risk that convective storms pose to an organization.

These tools take into account detailed location characteristic information, and potential vulnerability by including details on the occupancy type and construction of the business’s property; they then calculate the probable financial losses from a range of possible storm scenarios.

This gives businesses a projection of their potential exposure to severe convective storm losses.

The model can estimate the likely financial loss from the scenario modelled, the likely average annual loss from storms and the probable maximum loss for different probabilities of storm events.”

Paul Ward | Head of Property and Casualty, WTW

The model can estimate the likely financial loss from the scenario modelled, the likely average annual loss from storms and the probable maximum loss for different probabilities of storm events.

This analysis is important to examine exposure and potential losses that may occur from the storm and the probability of the storm occurring. To take one recent example, a large car dealership with branches across the US, was hit by a convective storm in Plano, Texas that produced baseball-sized hailstones.

The damage was so severe that at two dealerships in the town, 80% of vehicles were written off, including 250 new cars, and buildings and signage were also hit. Losses to the client were significant.

Armed with good-quality data, organizations find it much easier to make decisions about how to manage their convective storm risk. However, they may still need support given the unpredictable nature of severe convective storms.

Specialist consultants can help with risk analysis, hazard modeling and vulnerability assessments, all of which produces more – and higher-quality – insight to support better-informed choices about risk reduction through insurance and mitigation.

Traditional versus parametric insurance

Traditional insurance products may provide cover for storm damage to buildings and contents, and cover costs such as business interruption.

However, they are not the only way to protect against convective storm damage, with alternative risk transfer solutions available too.

These can be an effective source of protection where insurance is unavailable or too expensive; such solutions can also operate alongside traditional cover.

In particular, parametric insurance can be useful for covering gaps left by property policies – perhaps where certain types of risk are not covered in the policy, or where higher excesses or lower limits apply.

Parametric policies pay out when an event such as a convective storm reaches a certain magnitude in a set location, as measured on a scale or by a formula specified in the cover. The pay-out is triggered irrespective of the damage caused.

Such cover is transparent – policyholders know exactly what they will receive in specific circumstances – and claims are usually settled quickly, since no loss adjustment process is required.

The pay-out can be used in any way the organization sees fit – including for costs such as business interruption or supply chain disruption, which traditional property insurance may not cover. On the other hand, policyholders must accept that the policy won’t pay out if the trigger level is not met, even if they have suffered losses.

The bottom line? Organizations now need to assess their exposure to convective storms and respond appropriately. Contact us now to discuss how we can help you manage this risk effectively.


  1. Natural Catastrophe Review July - December 2023 Return to article
  2. Large hail, some softball sized, pummeled Kansas City. Here’s the hardest hit areas Return to article
  3. 2024 US convective storm season already breaking hail records: CoreLogic Return to article
  4. People blown from apartments as typhoon-like winds ravage southern China/ Return to article
  5. Insured losses from severe thunderstorms reach new all-time high of USD 60 billion in 2023, Swiss Re Institute estimates Return to article
  6. Is the record number of convective storms in the first quarter a sign of things to come in the U.S.? Return to article

Paul Ward
Head of Property and Casualty

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