Texas hailstorms and the cost of severe convective storms

Published 2018-06-12 · General

Severe hailstorms are among the most frequent sources of insured property losses in Texas. A single storm crossing a large metropolitan area such as Houston can damage roofs, vehicles and commercial buildings across thousands of policies in a few hours.

These so-called severe convective storms are individually smaller than hurricanes, but their frequency makes them a major driver of annual losses for primary insurers. Many of those losses are retained by insurers or absorbed through aggregate reinsurance covers rather than per-event catastrophe programs.

For reinsurers, the key questions are how storm frequency is trending, how building values and repair costs are rising, and whether models capture the risk adequately. Hail-resistant roofing and updated building codes are increasingly discussed as ways to reduce losses over time.

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