Credit: Jozef Jankola/Adobe Stock
Hailstorms are driving record insured damages from severe convective storms, according to a new report from Allianz Commercial.
Hailstorms, more than tornadoes, now account for the bulk of SCS losses. representing 50% to 80% of all losses, the report found. The U.S. is the top loss location for hail claims.
Severe convective storm losses totaled more than $60 billion last year, accounting for nearly half of all natural catastrophe losses. The U.S. is also the top spot for SCS losses in general, representing more than 80% of the value of insured SCS losses globally.
"Severe convective storms are still often viewed as a 'secondary peril,' yet their cumulative losses now rival — and at times exceed — those of primary perils like hurricanes," said Thomas Lillelund, Allianz Commercial CEO, in a statement. "This reality highlights the urgent need for businesses to reassess their risk exposure and strengthen operational resilience through proactive, locally informed measures that limit both physical damage and disruption."
A baseball-sized hailstone can reach speeds of up to 100 miles per hour or more, causing significant damage. Hailstorms tend to impact buildings — particularly roofs — and vehicles the most, which are major drivers for expensive insurance claims. Hail losses are also rising as storms increasingly impact high-value assets like solar panels and aircraft fleets.
Inflation is a factor driving up hail-related losses as well. For example, since 2000, the cost of asphalt roof replacements has increased by 250% in some regions, rising 45% in the last five years alone.
AI tools are being developed to help businesses better understand their risk and identify weak points to minimize damage, the report said.
"Traditional catastrophe models have long struggled to capture property-specific risk factors, such as roof type and asset value, or the cumulative effects of hazards like hail on building envelopes," said Michael Bruch, global head of Risk Advisory Consulting Services at Allianz Commercial, in a statement. "As AI becomes embedded in core risk processes, its most meaningful benefit for customers is its ability to support smarter, evidence-based resilience strategies that adapt to changing weather patterns, rather than relying on historical norms. A data and AI-driven risk management approach is the future and will be essential for organizations aiming to thrive in an increasingly volatile climate environment."
Photo credit: Jozef Jankola/Adobe Stock
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