Catastrophe risk modeler Karen Clark & Company (KCC) is projecting that insured losses from severe convective storms (SCS) in the US will come in below average for 2026, based on loss activity recorded through the first half of the year.
KCC's projection is grounded in the fact that accumulated losses through the end of June typically account for more than 75% of total annual SCS losses, giving early-year data strong predictive value for the full-year outcome.
According to KCC, the relatively muted first half occurred despite several multi-billion-dollar events, with losses in typically high-activity spring months such as May coming in well below normal.
The firm attributed this to a persistent high-pressure system that sat over the Southeast for much of May, blocking the southerly storm tracks that the jet stream usually produces in spring and that typically drive the heaviest losses across the Southeast and Texas.
That high-pressure pattern brought warm, dry, sinking air that suppressed convective storm development, KCC said, resulting in almost no severe storm activity across the region for the entire month, while prolonging drought conditions and contributing to above-average wildfire activity in the Southeast. SCS impacts during May were largely confined to the Central Plains instead.
KCC's outlook points to a geographic shift in loss activity for 2026, with the Upper Midwest expected to see above-average SCS losses while Texas and the Southeast run below normal.
That pattern is consistent with separate first-half data from reinsurance brokers Aon and Gallagher Re, both of which flagged Illinois and Indiana as setting new annual tornado records by mid-year, driven partly by a March 10-11 outbreak that produced record hail near Chicago and EF3 tornado damage near Kankakee.
KCC's below-average projection lines up with broader industry catastrophe reporting for the first half of 2026.
Gallagher Re estimated US SCS insured losses at more than $22 billion as of June 18, while Aon put the figure at approximately $27 billion for the same period.
Both figures sit below the five-year first-half average of $38 billion and the 10-year average of $30 billion cited by Gallagher Re, even though 2026 marks the 11th consecutive year that annual US SCS losses have exceeded $20 billion.
Aon separately identified an April 23-29 SCS outbreak as the single largest insured catastrophe event of the first half globally, generating more than $5 billion in losses on its own.
Despite the calmer national picture, SCS has become the dominant force behind US homeowners insurance pricing, and a below-average year is unlikely to reverse that trend quickly.
Insurify projects the national average home insurance premium will rise roughly 4% in 2026, marking a fifth straight year of increases, with hail-prone states such as Minnesota, Colorado, Iowa, Nebraska and Oklahoma among those that saw rate hikes of 20% or more over the past year.
More than 43.5 million US properties now face moderate or greater hail risk, according to Cotality's 2026 Severe Convective Storm Report, and Chicago has emerged as the most financially exposed metro area in the country for the peril.
Insurers in several of these states have responded by raising wind and hail deductibles or shifting harder-to-price risks into the excess and surplus lines market, where standalone wind coverage and deductible buyback options have expanded as standard carriers pull back.
A quieter SCS year also carries implications for the reinsurance and insurance-linked securities markets. Aon has noted that lower-than-recent-average SCS losses reduce the volume of losses cedants pass on to reinsurers, even as repeated midsized events continue to generate meaningful earnings volatility for property writers.
That dynamic is unfolding alongside a substantial buildup of reinsurance capital, which Aon estimated at approximately $790 billion globally at the end of the first quarter, a combination that has intensified competition during the spring and summer renewal season.
For carriers and ILS investors tracking exposure in real time, KCC said its SCS model provides daily hail and tornado and wind intensity footprints, allowing industry losses to be accumulated by day and event so that portfolios can be marked to market on an ongoing basis.
The model is built on AI-informed physical modeling and hundreds of terabytes of high-resolution atmospheric data, according to the firm.
With six months of the year remaining and hurricane season still to play out, KCC's below-average projection for SCS losses offers the industry some near-term relief at the aggregate level, even though the shifting geography of storm activity toward the Upper Midwest and persistently elevated homeowners rates suggest the underlying pricing and exposure challenges from this peril are far from resolved.
