Inside the Hail Lab Confronting a $30 Billion Challenge

The risks that prove most costly are not always the ones that dominate the headlines.

While businesses and governments have poured billions into hurricanes, wildfires, and floods — disasters that command front pages and monopolize political attention — other so-called ‘secondary perils’ have steadily increased in frequency and intensity, inflicting human and financial losses that are now rivalling those of their more high-profile counterparts.

This is particularly true of severe convective storms (SCS) and their most dangerous payload: hail. In the US, an inflection point appears to have been reached. A single catastrophic hail event in the US can now inflict roughly the same financial damage as a Category 4 hurricane, according to financial data company Cotality. A storm with a 2% annual probability of occurrence — a 1-in-50-year event — could generate US$30bn in insured losses alone. For comparison, Hurricane Milton in 2024 produced between US$6-11bn in insured losses, according to catastrophe risk modeling firm Verisk.

And yet understanding of SCS and hail risks, and the industry’s ability to predict their financial impacts, remains limited. “If you compare perils, a catastrophe [‘cat’] model for hurricane risk I would say is probably a ‘teenager looking to graduate high school,’” says Victor Gensini, a professor at Northern Illinois University’s Department of Earth, Atmosphere and Environment. “Cat models for SCS are like literally just getting out of diapers.”

Gensini also directs the Center for Interdisciplinary Research on Convective Storms (CIRCS), a collaboration launched last September between Northern Illinois University, the University of Wisconsin-Madison, and 13 insurance and risk modeling industry partners. Its mission: to produce data and research that insurers and catastrophe modelers can actually use to improve their understanding of SCS risks — before these storms outpace the tools designed to price them.