The final week of May brought a wave of damaging severe convective storms and flooding across the southern United States, with insured losses likely to reach into the billions, according to global insurance and reinsurance broker Aon.
“A complex series of slow-moving low-pressure systems and frontal boundaries amid abundant atmospheric moisture triggered repetitive severe weather in the southern United States over the past week,” Aon said.
“While multiple waves of storms were seen on May 22-26, some of the strongest thunderstorms occurred on May 24-26. Over 470 storm reports were submitted to the Storm Prediction Center (SPC), with most coming from Oklahoma and Texas. Extremely large hailstones over 4 inches (10.2 cm) in diameter and reports of peak wind gusts exceeding 70 mph (113 kph) were seen in northern and central Texas, primarily within rural areas.”
Central Texas was heavily impacted on May 28, when a powerful supercell thunderstorm tracked over 100 miles, hit the Austin metro area with 2-inch hail and a 77 mph microburst wind gust at the city’s airport.
More than 75,000 customers lost power, and widespread damage to homes, vehicles, and infrastructure was reported.
The broker also noted that large portions of eastern Texas also suffered severe weather and flooding damage over the past week, causing at least 540,000 people to lose power.
This included Harris, Montgomery, and Jefferson counties within the Houston metro area, which saw damage on late on May 26 and again on May 28. Other notably impacted areas in Texas were Gregg, Henderson, Smith counties.
Additionally, scattered severe weather and flooding incidents also occurred in northeastern Oklahoma. Widespread downed trees caused notable property and vehicle damage within the town of Broken Arrow, just outside of Tulsa.
“Over the past week, the vast majority of material losses were attributable to hail and wind damage seen in Austin, Texas on May 28. Given this, along with severe weather and flooding damage seen elsewhere, total economic and insured losses may reach into the billions USD,” Aon explained.
This latest outbreak comes on the heels of two earlier severe weather systems that hit the central and eastern U.S. between May 14–20, which Aon last week warned could represent one of the most expensive severe weather events in U.S. history on an inflation-adjusted basis.
Those outbreaks brought tornadoes, large hail, and destructive winds across multiple states, further compounding what is shaping up to be an historically active and costly convective storm season.
It’s important to note how the accumulation of high-frequency, high-severity weather events over a short period raises concerns for insurers and reinsurers alike.
Further meaningful losses could erode attachment points on aggregate reinsurance and retrocession programs, or trigger actual losses on layers that have already attached, a growing risk as many catastrophe bond and aggregate reinsurance contracts near their mid-year risk period end dates.
