Forecasting Regional Severe Convective Storm Damages on the 12-mo Time Horizon

Annually severe storm events account for $54 billion in damages, the costliest hazard in the US. As such, this study endeavors to forecast the cumulative risk of severe convective storm (SCS) damage during upcoming 12-mo periods, which corresponds to the policy duration and risk assessment horizon for a typical property insurance policy. Using monthly-mean ERA5 reanalysis from 2010 to 2020 on a 0.25-degree grid, the SCS risk was quantified by multiplying the 0–6-km bulk wind mean-layer convective available potential energy (MLCAPE) for each month. This ERA5-based “SCS score” was generated for the entire CONUS, but only calibrated against rolling 12-mo SCS damages in Florida, to limit the influence of CONUS-wide variations in SCS climatology. For each month in the 13-year study period, a rolling SCS score was calculated by averaging the SCS score for the current month (t₀) and the next 11 months (t₁, ..., t₁₁) at each grid location. Additionally, all SCS reports in Storm Data for the same 12-mo and grid cell were extracted, summed, associated with the mean SCS score, and cross-checked with claims activity from an insurance industry partner. This produced a database of SCS scores and associated SCS reports for all locations in Florida from 2010 to 2022 on a rolling time period, which revealed that locations with SCS reports were indeed associated with larger 12-mo mean SCS scores. Using a seasonal ARIMA, a form of time series forecasting, future rolling-average SCS values were predicted for 2023 to “forecast” the SCS activity across the state. These “forecast” values were compared to the total statewide SCS reports for the 12-month. While the time series forecast struggled to capture large, inter-annual fluctuations in SCS scores which weakened the relationship again observed SCS reports in 2023, our findings nonetheless suggest promising relationships between the 12-mo SCS score and the observed SCS reporting, which may be usual for insurance underwriting practices.