Losses to insureds due to severe thunderstorms reached an “all-time high” of around $60 billion in 2023, according to new research.

Leading re/insurance company Swiss Re found that severe convective storms (SCS) were the main contributor of losses which exceeded $100 billion for the year, stating it was the first time ever that this type of event had caused such high loss levels for the insurance industry.

However, at $6 billion in losses, the earthquake in Turkey and Syria proved to be the costliest natural catastrophe of the year to date.

“The cumulative effect of frequent, low-loss events, along with increasing property values and repair costs, has a big impact on an insurer's profitability over a longer period,” explained Jérôme Jean Haegeli, chief economist at Swiss Re's Group. “The high frequency of severe thunderstorms in 2023 has been an earnings' test for the primary insurance industry."

The company’s research also found that in 2023, the amount of $50 billion insured losses for US SCS activity was exceeded for the first time — a figure it expects to continue rising.

Europe also experienced an increase in insured losses from severe thunderstorms, with Italy the most affected country in 2023 with insured losses of more than $3.3 billion.

“For the insurance industry, recent events provide robust benchmarks for estimating the increasing loss trends,” said Balz Grollimund, head of catastrophe perils at Swiss Re. "Nevertheless, to further progress the deeper understanding of this peril, it is important to get better insights from primary insurers on distributions of insured exposure and detailed claims data.”

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