Rethinking Frequency Perils: Verisk Updates Severe Thunderstorm Model

August 1, 2025 / 4 min read

In recent years, the insurance industry has seen rapid change in the complexion and severity of extreme weather events, especially severe thunderstorms. This peril, also known as severe convective storms, poses significant challenges for (re)insurers as event severity and industry losses increase.

Once considered a secondary peril, these events now drive record-breaking insured losses across the US, which exceeded $50 billion in the past few years. This has prompted a shift in how insurers and reinsurers model, understand, and manage their exposure.

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Among the most effective tools in addressing these evolving risks is Verisk’s Severe Thunderstorm Model for the United States, which provides (re)insurers with necessary insights to navigate increasingly complex severe weather events.

Our model offers a sophisticated approach to understanding and managing these risks. Whether refining underwriting strategies, optimizing portfolio composition, or ensuring regulatory compliance, this updated model can help insurers respond with greater clarity across small and large portfolios.

Here are five ways the updated Severe Thunderstorm Model for the United States is helping insurers and reinsurers rethink frequency perils.

1. Strategic portfolio growth

Complex portfolios—often fragmented across systems, teams, and geographies—may obscure opportunities to identify underpriced policies, overexposed segments, or profitable niches. The severe thunderstorm model can help pinpoint exposure clusters, align them with risk appetite, and guide more strategic portfolio decisions. With physically realistic sub-peril modeling and updated event catalogs, it also supports clearer aggregate and occurrence loss exceedance probabilities and tail risk views—helping teams optimize reinsurance structures, manage capital allocation, and meet growing demands from boards and investors. Larger catalog sizes up to 100,000 are available to support high-fidelity views needed for ratemaking and uniquely composed specialty books.

2. Improved underwriting precision with structural vulnerability framework

The U.S. severe thunderstorm model helps insurers assess property-level risk, incorporating the latest science driving a diverse and nuanced vulnerability suite. By evaluating how specific building attributes such as construction type, roof age, and roof covering affect a property’s resilience to severe thunderstorm events, (re)insurers can be empowered to make more accurate decisions: flagging high-risk properties, refining deductibles, and reducing claims uncertainty. The model brings greater precision to frontline underwriting, especially in high-frequency event locations where small details drive big losses.

3. Enhanced pricing strategy with solar and specialty risk insights

As renewable energy sources become more prevalent, it’s imperative for models to capture their unique vulnerability to hail, straight-line wind, and tornadoes. The updated severe thunderstorm model provides new support for renewable assets such as solar farms and integrates additional specialty risk modules, such as marine assets and industrial facilities, so underwriters and reinsurers can adjust capacity and pricing accordingly.

As carriers move to differentiate offerings for green infrastructure and alternative energy clients, and as many begin aligning with net-zero underwriting commitments, the model meets these needs by more accurately quantifying risk for pricing and portfolio management.

4. Enabling smarter risk transfer

Hail has been a major driver of losses in recent years, and it’s vital to model this sub-peril in a robust and physically realistic way. Verisk’s severe thunderstorm model captures hailstorm severity, footprint, and local impact by factoring in storm swath intensity, regional hail size trends, and structural vulnerability. This captures where damage is most likely to occur and how severe it could be, helping insurers quantify their exposure across perils and regions and strategically offload portions of that risk through reinsurance or alternative capital markets. This helps protect against extreme loss scenarios, stabilize earnings, and free up capital for growth, especially in hail-heavy states such as Texas, Oklahoma, Kansas, Colorado, and Illinois, where recent losses have presented significant challenges to insurers’ profitability.

5. Helping insurers stay aligned with evolving regulatory standards

Regulators and stakeholders are demanding more transparency around climate and catastrophe risk, and they expect insurers to respond with more than just historical data. With rising scrutiny from departments of insurance, the National Association of Insurance Commissioners, the Securities and Exchange Commission, and global environmental, social, and governance frameworks, the severe thunderstorm model can equip insurers with near-present climate data that meets evolving regulatory standards.

From submissions that align with the Task Force on Climate-related Financial Disclosures to state-level rate filings, the model provides a credible foundation for climate reporting, capital planning, rate making, and reinsurance negotiations—helping carriers to be not just compliant, but prepared.

Why this matters now

In 2023 and 2024, the U.S. recorded two of its costliest years for thunderstorm losses, both exceeding $50 billion. As the industry faces yet another volatile season, it’s more important than ever to take a hands-on, proactive approach that goes beyond estimating losses. Our updated Severe Thunderstorm Model for the United States provides the industry with an industry-leading, robust, and comprehensive tool to facilitate more timely risk management.

Discover how Verisk’s Severe Thunderstorm Model for the United States can help you price smarter, manage accumulation, and meet evolving regulatory expectations.

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