Record Losses in 2023 Driven by Severe Convective Storms
In 2023, the world witnessed a staggering 28 separate confirmed billion-dollar weather or climate disaster events – surpassing the previous record set in 2022 with 22 events. This is an alarming surge, seeing as the previous five years have averaged 18 such events annually with over $1B in economic losses per year.
An increase in Severe Convective Storms (SCS) – the architects of this chaos – has impacted the potential for building damage. However, small mitigation measures can drastically increase the resilience of structures. We’ve reviewed SCS impact on commercial buildings and other structures, as well as how risk management teams and insurance brokers of large property portfolios can proactively increase resilience.
The Impact of Severe Convective Storms (SCS)
It goes without saying that SCS events have the potential to wreak havoc across the world and financially impact multiple industries, but the commercial insurance industry has a small silver lining to rely on. Total insured losses tallied up to $108 billion in 2023, showcasing a commendable 23% decrease from the $141 billion recorded in 2022. The story behind these numbers is told at the intersection of rising costs, both property and repair, coupled with a surge in small but frequent SCS events. This combination has impacted the earnings of the primary insurance market.
The statistics reveal an almost 100% increase by total value in losses specifically attributed to SCS events. By late September 2023, U.S. insured losses from these storms had breached the $50 billion mark – a historic milestone for a single year. A dozen such storms, causing a billion dollars or more in damages, dominated the spring and early summer months, accounting for around half of the 10-figure disasters recorded in the last 12 months. La Niña took the lead, initiating SCS activity earlier than usual, while record temperatures in the Gulf of Mexico provided the ideal breeding ground for larger, fiercer storms.
The U.S. Scenario
The United States, due to its geographical location, stands particularly vulnerable to SCS, with insured losses growing at an annual rate of close to 10% from 1990 to 2022. Illinois led in tornado reports, surpassing Texas and Oklahoma. According to the global insurance brokerage giant, Gallagher, hail and wind emerged as the chief culprits in 2023. A staggering 349 reports of hail exceeding 2 inches, 89 events with hail surpassing three inches, and four instances with hail reaching four inches or more in diameter painted a vivid picture of the destructive forces at play.
Beyond Weather: Urban Development, Inflation, and Climate Change
The narrative expands beyond weather events as urban development, inflation, and accumulation of wealth concentration in disaster-prone areas have driven an escalation of losses due to natural hazards. Climate change looms large creating a future marked by increased temperatures, heightened drought risks, and more wildfires. The economic toll from the 2023 Maui wildfire is expected to top $6B and the impact of earthquakes on losses has highlighted the need for strong building standards and study. As if on cue, 2024 ushered in a stark reminder with a massive 7.6M earthquake shaking Japan on New Year's Day.
Despite predictions, hurricanes spared the United States in 2023, thanks in part to El Niño's influence. However, Tropical Storm Risk anticipates a resurgence in 2024, foreseeing approximately 20 named storms. El Niño's continued impact will shape the frequency of SCS, adding an extra layer of complexity to a potentially prolonged and impactful wildfire season.
Failing to adequately make changes under the future risk of SCS and consider the mitigation options available for the building can result in significant damage to the structure, a heightened risk to human life, and can impact coverage and premium values for property owners, their brokers, and risk management teams. Let’s cover some simple ways to reduce that risk.
Building Damage Possibilities
Now that we’ve established the recent and growing impact of Severe Conductive Storms, it is prudent to provide a path forward to those organizations who own property most likely to be impacted by these disaster events in the future. Simply put, Severe Convective Storms or violent thunderstorms are often associated with thunder, lightning, heavy rain, hail, strong winds, sudden temperature changes, and sometimes tornadoes. They can occur all year round but are most common during summer.
SCS events can cause significant damage to buildings due to high winds, hail, and flying debris. Storm damage can include:
- Structural damage
- Roof damage due to high winds
- Damage to the windows due to flying debris allowing rain and hail to enter the building
- Exterior cladding damage which may lead to water intrusion
These damages can have both direct and indirect consequences. For example, damage to windows or building cladding from flying debris can lead to significant damage from water intrusion.
Mitigating Building Damage
Based on a recent study by the National Institute of Building Sciences (NIBS), every $1 invested in disaster mitigation saves society $6. For organizations looking to mitigate damage from the increased threat of Severe Convective Storms and the likelihood of damages, various strategies can be implemented. These include, but are not limited to:
- Scheduled vulnerability assessments
- Increased and regularly scheduled maintenance
- Roof and cladding inspections
- Structural alterations to consider
For organizations looking to reduce their risk through mitigation, there is some good news. Simple, regular efforts can greatly impact a building’s performance during a Severe Convective Storm. Overviews of simple, proven mitigation strategies are presented below.
Vulnerability Assessment
Prior to a disaster and on a regular schedule, facility personnel should consider performing a vulnerability assessment to identify the risks for buildings and determine options available to mitigate hazards should a building experience an SCS.
Regular Maintenance
Regularly scheduled maintenance is imperative to decreasing the risk due to SCS. Building staff should ensure that loose debris like tree branches, outdoor furniture, roof shingles, and trash is removed. Gutters, roof drains, scuppers, and/or downspouts should be cleaned regularly.
Inspection of Roof Systems and Cladding
Roof systems and cladding should be inspected for openings or deterioration that may allow water to infiltrate. Additionally, ensuring that water can adequately drain from the site by removing any clogged or obstructed pathways. Consideration for loose gravel, on the ground or used as ballast, should be taken as wind-blown rocks can cause severe damage to windows, doors, and cladding.
Structural Considerations
A structural engineer can inspect the building to ensure that a continuous load path exists. A lack of connections between two structural members can lead to catastrophic failure of a building during a high wind event. Where garage or overhead doors are present, reinforcement girts can be added to reduce the probability of failure. Doors and windows can be designed with impact-resistant glazing or protected with rated opening protection.
Preparedness in Severe Convective Storm-Prone Regions
In the face of escalating challenges posed by Severe Convective Storms (SCS), the record losses of 2023 serve as a stark reminder of the urgent need for preparedness and strategic building mitigation. As we navigate through the aftermath of unprecedented weather events, the integration of proactive measures, structural considerations, and regular maintenance becomes crucial. By understanding the impact of SCS and implementing targeted strategies, we can fortify our buildings and communities against the forces of nature, ensuring resilience in the face of an evolving climate landscape and effectively avoiding increased insurance premiums. The lessons learned from 2023 pave the way for a future where mitigation efforts stand as a shield, protecting lives, property, and the well-being of our society.
