Catastrophic severe convective storms over Memorial Day weekend will likely result in multibillion-dollar insured losses, according to Gallagher Re.
State Farm, the largest U.S. homeowners and personal automobile insurer, said it has taken in about 25,650 claims from 16 states from the storms.
The majority of claims taken in by State Farm from the May 25-27 event, about 14,350, were from homeowners. The top cause of homeowner losses was wind, followed by hail, said spokesperson Benjamin Palmer.
For auto policyholders, hail was the top loss cause.
More than half of the overall claims at State Farm came from Missouri and Arkansas. The third-greatest number of claims, 4,350, were filed in Texas then Kentucky, which had about 1,950 claims.
Gallagher Re Chief Science Officer Steve Bowen said claims numbers throughout the impacted areas should continue to rise as people return home. The storms struck during a popular time for travel.
A relentless procession of severe storm systems started rolling across multiple states, primarily in central and southern states, in late April, and the bill to insurers for damage in May alone could hit $10 billion, according to Bowen.
“It’s turning into an expensive month,” he said, with year-to-date insured losses from the peril nearing $25 billion.
U.S. severe convective storm insured losses have exceeded $20 billion for nine consecutive years, including in 2023, when they reached an estimated $63 billion.
Activity started earlier last year, compared with a quiet first quarter this year.
Local storm reports reached their highest level for May this year since May 2011, said Bowen.
A severe convective storm in the Houston area on May 16 packed hurricane-strength winds that blew out high-rise commercial building windows, toppled trees and transmission towers, damaged homes and flipped trucks on roadways. The destruction came from another series of severe storms across a belt of southern states in mid-May. State Farm took in 4,700 of 5,400 related claims from Texas through May 20 from that earlier event.
Year-to-date, the United States has been hit by 30 tornadoes rated EF-3 or higher, six more than the full-year average for the past decade, said Bowen. Since January, he added, the 511 reports of two-inch or larger hail exceeds the five-month decadal average of 348, correlating to higher insured loss totals.
The five largest writers of homeowners multiperil in Missouri in 2022, based on direct premiums written, were: State Farm Group, with a 24.79% market share, American Family Insurance Group, 15.47%; Liberty Mutual Insurance Cos., 8.97%; Farmers Insurance Group, 6.73%; and Travelers Group, 5.25%, according to BestLink.
The five largest writers of homeowners multiperil in Arkansas in 2022, based on direct premiums written, were: State Farm Group, with a 26.23% market share; Farm Bureau Mutual Insurance Co. of Arkansas, 13.31%; Allstate Insurance Group, 8.06%; Shelter Insurance Cos., 7.59% and Farmers Insurance Group, 7.59%, according to BestLink.