Tornado outbreaks a growing threat for insurance industry

Tornado outbreaks a growing threat for insurance industry

Tornado outbreaks a growing threat for insurance industry Carriers understanding of the risks posed by tornado outbreaks got a boost with the publication last week of a new study showing that the average number of tornadoes in these outbreaks has risen since the mid 1950’s, and that the chance of extreme outbreaks has also increased.

Outbreaks – which can last up to three days – are large-scale weather events that span huge regions; the largest ever caused billions of dollars in damage and cost more than 350 lives when it formed 363 tornadoes across the United States and Canada in 2011.

The last decade has seen the industry have to cover an average of $12.5 billion in insured losses each year according to the research’s sponsor and global reinsurance advisor Willis Re.

The study’s authors do not claim to know what is driving the increase in ‘tornado-factory’ outbreaks, saying only "the science is still open."

According to lead author Michael Tippett, a climate and weather researcher at Columbia University's School of Applied Science and Engineering and Columbia's Data Science Institute "It could be global warming, but our usual tools, the observational record and computer models, are not up to the task of answering this question yet."

“When it comes to tornadoes, almost everything terrible that happens, happens in outbreaks. If outbreaks contain more tornadoes on average, then the likelihood they'll cause damage somewhere increases."