Severe convective storms (hail, damaging wind, and tornadoes) have become the costliest insured peril of the 21st century, reshaping how insurers, investors, and asset owners price risk, new First Street analysis reveals.
In 2025, SCS generated approximately $82 billion in global economic losses, which accounted for nearly one-third of all worldwide natural catastrophe losses and exceeded the impact of any other peril.
Moreover, cumulative insured losses from SCS have overtaken those of tropical cyclones for the first time ever.
New research released by First Street, titled Global Severe Convective Storm Risk: Pricing Economic Exposure to a Rising Peril, provides the first globally consistent analysis mapping out where SCS hazards collide with dense populations and economic assets, alongside an analysis of how rapidly this exposure is expanding.
Compared to traditional catastrophe studies that treat hail, damaging wind, and tornadoes as localised “secondary” perils, this research quantifies SCS as a systemic, portfolio-level financial risk on a global scale.
Severe convective storms have become one of the fastest-growing sources of physical climate risk. First Street’s analysis focuses on what markets face today:
- Annually, damaging SCS winds (≥65 mph) expose $17.8 trillion in GDP (9.8% of global output) and 907 million people, with exposure projected to grow nearly 14% to $20.2 trillion in 30 years.
- Damaging hail (≥1 inch) annually exposes $10.6 trillion in GDP (5.8% of global output) and 567 million people, rising to $10.8 trillion in 30 years.
- On a 1-in-20-year storm basis, 62% of global GDP is exposed to damaging winds and 52% to damaging hail, demonstrating that these hazards threaten most of the global economy.
- Since 2000, inflation-adjusted SCS losses have increased roughly 6.8% annually, more than doubling the 2.7% overall growth rate for weather-related losses.
The report found that exposure is concentrated across the world’s major economic corridors. The Americas carry the greatest relative exposure, with 13.6% of regional GDP exposed annually to damaging wind and 11.2% to hail, the highest shares of any region.
Exposure in the region is driven by the overlap of severe-storm climatology with high-value insured assets across the United States, with Texas being the single largest concentration of hail-exposed GDP anywhere in the world.
Asia-Pacific holds the largest absolute exposure, with $10 trillion in GDP exposed to damaging wind and $4.3 trillion to hail, spanning globally significant manufacturing and logistics hubs such as Jiangsu, Guangdong, and Taiwan.
Over the next 30 years, climate change is anticipated to accelerate the expansion of damaging wind exposure, with the fastest increases occurring in the Asia-Pacific region (surpassing 18%) and across Europe, the Middle East, and Africa (approximately 14%).
This rapid intensification will introduce significant SCS risks to markets that have historically seen minimal underwriting focus, analysts noted.
“For too long, severe convective storms have been priced as background noise: small, local events that diversification was assumed to absorb,” said Matthew Eby, CEO of First Street. “This research shows the opposite. When you map these hazards against where the world actually produces economic value, SCS is a recurring, correlated risk sitting on top of trillions of dollars in GDP. Making that visible is the first step to pricing it correctly.”
“Severe convective storm exposure is concentrated in the most productive parts of the global economy, and it’s expanding, particularly for damaging wind across Asia-Pacific and Europe,” said Dr. Jeremy Porter, Chief Economist at First Street. “The takeaway for investors, lenders, and insurers is clear: SCS can no longer be treated as a secondary peril. It belongs in due diligence, stress testing, and long-term asset performance assumptions alongside hurricanes and wildfire.”
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