Aon's Report on Severe Storm Outbreaks and Insured Losses

A recent report by Aon predicts that a series of severe storm outbreaks across the Mid-Atlantic US and Canadian prairies could result in insured losses totaling billions. The storms began on June 5, impacting areas from the Rockies and Great Plains to the Mid-Atlantic, with large hail, torrential rains, and winds exceeding 90 mph. The extreme weather caused widespread damage, including isolated incidents of flash flooding and fatalities. On June 6, New York City saw significant damage with over 2,000 trees affected, while Colorado experienced hailstones up to four inches in diameter and wind gusts in Kansas and North Dakota that surpassed 90 mph.

The most severe impacts occurred from June 9 to 11, as intense thunderstorms swept across northern Illinois, southern Wisconsin, and northwest Indiana. Wind speeds reached up to 94 mph in Wisconsin, causing extensive structural damage and power outages for over 500,000 customers. Communities in Illinois and Indiana, such as Streator and Hobart, suffered destruction from tornadoes, while an EF-1 tornado in Freeland, Michigan, affected numerous homes.

Regional Impact and Insured Losses

Canada also faced significant impacts, with regions like Manitoba and Saskatchewan experiencing 9.8 inches of rainfall and four-inch hail, leading to flash flooding, highway closures, and evacuations of 150 residents in the Swan Valley area, alongside 25,000 power outages. Aon anticipates that the primary financial burden will stem from the destruction occurring between June 9 and 11, especially in the Midwest, heightening challenges for US property insurers.

Citing the Insurance Information Institute, Aon notes that tornadoes, hail, and thunderstorms resulted in $51 billion in insured losses in 2025, marking the third consecutive year these figures have surpassed $50 billion. This highlights their dominance over other natural disaster categories. Globally, severe convective storms emerged as the most expensive insured peril of the 21st century, with $61 billion in losses recorded in 2025, setting a record for annual totals.

Insurance and Reinsurance Adjustments

Reinsurance is under scrutiny as policies with high attachment points expose primary insurers to repeated severe events. From January to September 2025, the US reported 39 such events with average insured losses above $1 billion each. Tehya Duckworth from Munich Re Specialty North America remarked on the inflation impact and rising exposures, stressing the need for ongoing adjustments despite increasing attachment points and retention levels in 2023.

Home insurance pricing is already feeling the effects, with premiums projected to rise by 4% in 2026, continuing a pattern of increases since 2021. Minnesota and Colorado experienced substantial hikes of 34% and 33%, respectively. These market dynamics have opened opportunities for excess and surplus lines carriers, as capacity withdrawals hit admitted markets.

The Chicago area, significantly affected by June's weather events, remains a focal concern due to its status as the highest urban hail exposure in the US, with a reconstruction cost value of $1 trillion. This ongoing threat emphasizes the critical focus for insurers and reinsurers navigating these perils.