Severe storms and tornadoes wreak havoc across the US Midwest and South, leaving over 40 dead and causing widespread property damage.

A severe weather outbreak across the US Midwest and South is expected to be costly for the insurance and reinsurance industries, as tornadoes, hailstorms, strong winds, dust storms, wildfires, and flooding caused significant damage and loss of life over the weekend.

Meteorologists had warned of a potentially historic outbreak, with a powerful low-pressure system fueling severe storms from March 14–15. Andrew Siffert, Senior Meteorologist at BMS Group, had cautioned that the conditions were primed for widespread tornadoes, damaging winds, and heightened wildfire risks. The recent storms follow another deadly outbreak from March 3–6, which is already estimated to exceed $500 million in losses.

So far, insurance and reinsurance losses from severe weather and winter storms have remained below historical trends in Q1, benefiting aggregate reinsurance and catastrophe bond contracts. However, the March storms could erode these protections, particularly for insurance-linked securities (ILS), which were already weakened by California’s January wildfires.

The latest storms caused significant destruction across the Midwest and South, with Missouri being particularly hard-hit by tornadoes, resulting in at least 12 deaths. Texas and Kansas experienced severe weather, including a massive dust storm that led to vehicle pile-ups and fatalities. More than 150 wildfires were reported across Oklahoma, while flood warnings were issued for parts of Texas, Louisiana, Alabama, Arkansas, Tennessee, Mississippi, Georgia, Kentucky, and North Carolina. By Sunday evening, approximately 320,000 people were without power as recovery efforts began.

Missouri Governor Mike Kehoe described the devastation as "staggering," with hundreds of homes, businesses, and buildings damaged. Tornadoes also impacted Mississippi, Alabama, and Arkansas, with six deaths in Mississippi and three each in Alabama and Arkansas.

While tornado activity has been below average this year, the recent storms bring the count closer to normal levels and mark the beginning of the early spring severe weather season. The catastrophe bond market is monitoring these developments closely, as many multi-peril aggregate deals have already been significantly marked down due to the year’s earlier wildfires, increasing the likelihood of attachment. This could also have implications for private reinsurance and retrocession agreements, many of which are backed by ILS markets.