New CAS Research Paper Explores Ratemaking for Severe Convective Storms

The Casualty Actuarial Society (CAS) is proud to announce the release of a new research paper: Developing Rates for the Severe Convective Storm Peril in Property Insurance.

As severe convective storms and their associated sub-perils (i.e., hail, straight-line winds, and tornadoes) occur more frequently, insurers have looked for ways to understand and manage losses due to these high-impact events. In this paper, authors Julia Hornack, Jeffrey Schmidt, and Vadim Filimonov explore a cross-section of industry methods used to develop rates for severe convective storms in property insurance.

The authors begin with an overview of the current understanding of severe convective storms and discuss the geographic and demographic context within which they arise and wreak havoc. Current approaches to ratemaking to account for these storms are then described and compared, including additional factors that contribute to the development of effective rates. Last, the authors discuss additional data sources that can be used to make severe convective storm modeling more effective.

“For some insurers with concentrations of insured value in high-hazard regions,” the authors write, “severe convective storms have become an existential threat—depleting capital at alarming rates. For others, severe convective storms present a persistent earnings challenge, as they struggle to achieve rate increases commensurate with the rising cost of the peril. Regardless, most property insurers are attempting to understand and manage losses from severe convective storms with increasing rigor.”

Visit the CAS website to download the full report. 

The authors will present this paper at the 2025 CAS Spring Meeting, held in Toronto, Canada. The session will be livestreamed on Tuesday, May 6, at 9:45am ET. Learn more about CAS Spring Meeting and how to attend virtually or in person.