U.S. tornado losses approaching those of hurricanes

Losses of US$1 billion and higher from single tornado events are becoming more frequent, approaching hurricane damage losses, A.M. Best warns in a special report.Already in 2008, insured losses from severe weather systems have surpassed US$1 billion about US$850 million stemming from the tornado outbreak in the U.S. mid-South on Feb. 5 and Feb. 6, A.M. Best reports.Early damage estimates from a Mar. 14 tornado that struck downtown Atlanta and surrounding counties are at US$340 million, the report adds.Historically, hurricanes and earthquakes have on average generated higher losses per event than tornadoes. But recent tornado and related weather events have caused, on average, about 57% of all U.S. insured catastrophe losses in any given year since 1953, A.M. Best notes.In 2007, losses from these [tornado] perils generated 69% of total insured catastrophe losses.”As bad as they were, the losses in Atlanta could have been much worse,” A.M. Best’s Special Report says. “Catastrophe modelling data show that losses from a tornado outbreak striking a major metropolitan area or two, combined with damaging hail, could far surpass the record US$3.2 billion that insurers paid out from tornadoes and thunderstorms that affected 18 states in May 2003.”Since 2001, tornadoes and related weather events, including hail and severe thunderstorms, have cost the property and casualty industry an average of nearly US$4.9 billion each year in claims, the report continues.”Insurers now face the prospect that more frequent and severe tornado and thunderstorm events may lead to even higher catastrophe losses,” A.M. Best warned.