Insurers face $7-9.5bn bill in Q1 as US weather hits familiar pricey pattern
Extreme weather in the US in the first quarter will likely deliver insurers a bill for $7 billion to 9.5 billion from hail, tornado, and thunderstorm wind gusts, analysts at a key insurance brokerage have claimed.
“There is no doubt that the first quarter of the US insurance industry will be a costly one,” SVP and senior meteorologist for re/insurance broker BMS, Andrew Siffert, said of claims data and estimates from a series of 12 severe weather events.
With caveat for the vagaries of claims inflation, the grand totals “appear to be at or close to a modern-day record” even on a CPI-adjusted basis, Siffert claimed.
Top of the list: three events above the $1 billion mark in March, including Mississippi and Arkansas tornado systems.
Conditions driving the Q1 storm outburst "match closely" with other active severe weather years, in particular 2011 which included the four-day, 360-tornado "super outbreak" across 21 states in late April and a late May 241-tornado sequence known for the devastation of Joplin, Missouri.
Similarities to those April-May precedents bode poorly for Q2 2023, Siffert warned.
“It does appear that the dice are loaded for a higher occurrence of severe weather this spring season,” Siffert said.
Current conditions point to a short respite, but severe events could yet resume in April. Eventual losses remain a function of location vis-a-vis the density of insured values.
Data from the Storm Prediction Center of the US National Weather Service show 34 severe weather events in Q1 2023, tied with 2017 for the highest Q1 count to date this century where the average is just below 20.
Preliminary tornado counts from the National Weather Service include what appears to be an exceptional unseasonal surge in January and a near record 24-hour sequence rounding out the quarter March 31.
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