Gallagher Re estimates insured losses from the March 13-16 tornado and severe convective storms (SCS) could reach up to $3 billion.

Gallagher Re, a reinsurance broker, has estimated that the severe convective storm (SCS) and tornado outbreak in the U.S. from March 13-16 will be the most expensive severe weather event of 2025 so far, with insured losses projected to reach up to $3 billion.

During this multi-day event, various hazards—including tornadoes, wildfires, strong winds, heavy rain, and wintry conditions—impacted several parts of the country. Over 106 tornadoes were confirmed, with three reaching EF4 strength and ten classified as EF3. Large hail exceeding two inches in diameter affected approximately 28,000 people across Alabama, Kentucky, Louisiana, Missouri, Mississippi, and Texas.

Gallagher Re stated that most wind and hail-related damages would be covered by insurance, initially estimating losses for the private insurance industry between $1 billion and $3 billion. Before this outbreak, severe convective storm losses in the U.S. had been relatively low, totaling around $1 billion for the year.

The most significant damages were reported in highly populated regions of the Midwest, Southeast, and East Coast, making this the first billion-dollar SCS event of 2025. Additional losses resulted from wildfires in Oklahoma and Kansas, driven by strong non-thunderstorm winds.

Gallagher Re noted that the financial impact of severe thunderstorms has become a growing concern for the insurance industry, as annual insured losses from SCS events now frequently surpass $40 billion. With the peak U.S. SCS season approaching (April to June), the industry is closely monitoring whether 2025 will continue the trend of increasing severe weather losses seen in the past 15 years.

While this event could contribute to the erosion of aggregate deductibles in catastrophe bonds, its broad geographical impact makes it unlikely to significantly affect individual aggregate structures in the catastrophe bond and retrocession market. However, if more billion-dollar events occur, some cat bond structures could be at risk of attachment.