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Severe convective storm models

Severe convective storms (SCS) pose distinct challenges for modelers due to their highly variable severity, ability to cross borders, and complex spatial and temporal footprints. Typically, risk management for these events relies on historical data alone, which may result in inefficient capacity use and biased risk assessments due to over- or underreporting.

To address this challenge, Moody’s has designed powerful severe convective storm modeling capabilities to assist in developing effective and profitable strategies for managing risk from SCS.

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How we help

Our models are the first on the market that implicitly account for losses caused by lightning, which can add anywhere from 5% (single-family dwellings) to 80% (telecommunications) to the average annual loss of certain occupancy types.

01 Advanced hybrid modeling

Advanced hybrid modeling

 

Our severe convective storm models use a hybrid methodology that combines the strengths of statistical and numerical modeling techniques with historical data and claims analysis.

 

This approach helps you fill in the gaps and biases arising from incomplete claims and historical data records and to assess potential future losses in regions that have yet to sustain losses.

02 Catastrophic and non-catastrophic event sets

Catastrophic and non-catastrophic event sets

Our models are among the first on the market with separate event sets for both cat and non-cat events, providing you with a view of possible causes of losses.

Cat events are reflected within a low-frequency, high-severity event set, while non-cat events are reflected within a high-frequency, low-severity event set. Thanks to the models’ flexibility, users can activate or deactivate these distinct event sets, allowing for the isolation or aggregation of losses.

03 Flexible sub-peril modeling

Flexible sub-peril modeling

Our models help you examine losses from hail, tornado, and straight-line wind separately or together in any desired combination.

Where we help

Regional and country severe convective storm models

01 United States and Canada

United States and Canada

  • Moody’s RMS™ US and Canada Severe Convective Storm Model is built on a unified event set of over 80,000 simulated convective storm events. The model contains 800 unique vulnerability curves across 11 vulnerability regions, designed to capture regional variation in construction practices and regulation.
     

  • Lightning is not a separate sub-peril in the model but is implicitly considered within the hail vulnerability functions since the occurrence of lightning is highly correlated to the presence of hail.

02 Europe

Europe

  • Moody’s RMS Europe Severe Convective Storm HD Model provides a complete, high-resolution outlook of convective storm events built on 50,000 simulation years.
     

  • One consistent model is available for 17 countries in Europe, helping users understand the cross-country correlation of convective storm events.
     

  • The model's robust HD framework allows for time-based treaty terms like hours clauses and aggregate terms as well as temporal considerations such as seasonality of events — an important feature given that European convective storms generally occur in the midlatitudes in summer.

03 Australia

Australia

  • Moody’s RMS Australia Severe Convective Storm Model covers the Greater Sydney region, where approximately 70% of the country’s SCS historical losses have occurred.
     

  • The model's stochastic event set is built on 100,000 simulation years and includes sub-perils for hail, tornadoes, and downburst wind, with the latter two combined into a single wind sub-peril.

News and views

blog

May 27, 2024

 Moody's
Europe severe convective storms: Unpick the complexity with the latest risk models

In Europe, severe convective storm (SCS) losses have become an increasing concern for the insurance and reinsurance markets, with annual losses exceeding €5 billion for three consecutive years.

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blog

Feb 27, 2024

 Moody's
Severe thunderstorm risk: What you don’t know can hurt you

Many use experience-based ratings to underwrite severe thunderstorm risk but could be missing out on the full loss picture for this complex peril. Recent trends in industry claims practices, event severity, and exposure concentration have indicated that the risk landscape is changing, suggesting that past hazard and loss patterns may not be reflective of those in the future.

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