Historic Hail Activity Across the Southern U.S.
CoreLogic Weather Verification Technology captured the number of large-hail days (greater than or equal to two inches) across the country. In 2023 there were 141 days with large hail, higher than any year since 2003 (Figure 3).
Figure 3: The number of days each year with >= 2” hail. Source: CoreLogic, 2024
Compared to the past 20 years
2023 hailstorms were more common in Texas, the Southeast and the Plains (Figure 4). Substantial portions of these states are sparsely populated, so the mere presence of hail does not necessarily indicate damage. However, metropolises across these regions including Dallas-Fort Worth and Austin, TX, Minneapolis, MN, and Denver and Colorado Springs, CO were impacted.
Not all states experienced the same degree of increased hail activity this year.
The 2023 severe convective storm season, in terms of hail days, was less active relative to the past two decades across the northern states like Montana, the Dakotas, Minnesota and Iowa.
Figure 4: The percent change in number of hail (1”+) days in 2023 compared with the 20-year average for states with at least 10 days of 1+” hail. Source: CoreLogic, 2024
A Storm in Brief
A closer look at one week of severe thunderstorm activity during the period between June 11 and 16, 2023 illustrates the severity of these storms.
During this time, large hail and strong straight-line winds affected parts of the Dallas-Fort Worth area every day. Hail stones greater than four inches in diameter were recorded in Denton County, TX.
CoreLogic estimated that straight-line winds and hail from June 11-15 generated between $7 and $10 billion in insured loss.
Hail alone was estimated to comprise 95% of losses, making it one of the biggest hail losses in history.
If events like what occurred in mid-June become more frequent, then it will become imperative that carriers understand the factors driving the increasing in risk.
The remainder of this report will dive deeper into two factors that may have contributed to the record-breaking year in 2023; climate change and shifts in exposure.
Contributors The Impact of Climate
There is a clear connection between a warmer atmosphere, melting polar ice caps, raising global sea levels and increasing coastal flood risk. The direct connection between climate change and severe thunderstorm activity in the U.S. is less clear due to a combination of smaller-scale weather and ocean patterns, all of which influence weather across the country, and an incomplete historical record.
For example, severe convective storm activity in 2023 was likely influenced by quick changes to the oceans and atmosphere resulting from a multi-year La Niña which shifted to El Niño during the spring. Another contributing factor was the subtropical jet stream, a belt of winds located within the tropics. The stream was particularly strong in 2023 during the late spring and early summer. During June and July, the strength of the stream was stronger than usual across the southern plains, Texas and the south.
These interannual, annual and multi-year climate and ocean patterns are apparent in the oscillations of the hail-day data in Figure 3. Normalizing the annual data using a multi-year average would still show a general increase (Figure 3 trend line). However, it is difficult to determine if a long-term warming of the atmosphere or changes in exposure are the primary driver of increased severe thunderstorm activity without a more extensive historical record. For example, in the contiguous U.S. over the past 20 years, the annual number of two-inch or greater hail days increased only slightly (Figure 3 trend line), and there are mixed trends for individual states (Figure 4) including states with decreased hail activity this year. This U.S.-wide increasing trend could be attributed to climate change, or changes in reporting patterns (i.e., more homes and people reporting, easier reporting methods like social media).
Since a long-term climate change pattern cannot be identified as the key contributor, a deeper look at changes in the exposure landscape is needed to determine what is driving long-term severe convective storm losses.
New Homes Bigger Homes More Expensive Homes Migration & Inflation
The active 2023 hail season was certainly responsible for the high loss-year, but changes in exposure in the U.S. have and continue to exacerbate losses. Residential and commercial-residential (multi-unit apartments and condominiums) construction increased across the country since the last census in 2010. The number of housing units across the contiguous U.S. grew by 7% over the last decade to over 140 million. This growth is not consistent across each state. Figure 5 below shows the percent change in housing units between 2010 and 2020 for each state.
Figure 5: Housing unit percent growth from 2010 to 2020. Source: U.S. Census Bureau, 2021
Housing location and environmental preferences are driving the state-level growths. In the post-pandemic world, some people are prioritizing a lower cost of living, warm climates, and more physical space. In the work-from-home environment that is still prevalent across many industries, there is less need to live in costly, densely populated cities like New York City.
Understandably, residential development has increased in states like Texas, Colorado and Florida that offer preferred financial and environmental conditions. However, these are some of the states with the greatest number of severe hail days in 2023 (Figure 4).
Not only are there more homes, but repairs and reconstruction post-event are more expensive. Inflation in the form of more expensive building materials and labor is contributing to higher individual claims. Over the last five years, construction costs for single-family homes in the U.S. increased dramatically. The U.S.-wide average single-family reconstruction cost increased 38.5% (Figure 6) between 2018 and 2023[1] driven by large increases in materials and labor.
[1] CoreLogic RCT™
Figure 6: Quarterly change in single-family (2,400 square foot, two story home built in 1988) reconstruction cost in the U.S. Source: CoreLogic, 2024
Hail most frequently damages roofs, siding and windows of homes, sometimes requiring complete replacement post-event if the damage is severe enough to compromise the structural integrity or watertightness of the home. Asphalt shingles, one of the most common roof-type materials used throughout the U.S. experienced a 40% increase in cost over the past five years (Figure 8). The cost of ceramic tiles, which are also commonly used for roofing material, has increased by 26% since 2018. Disregarding the increased cost of labor, this change in material costs alone HAS made roof repair much more expensive in 2023.
Figure 7: The costs for common construction materials have drastically increased over a 5-year period. Source: CoreLogic 2024
Inflation has affected the cost for labor in addition to materials. Since 2018, the costs for roofers, glaziers (window installers), painters, plasterers and tile setters have increased 17% - 18% (Figure 8), driven by high demand and labor shortages across the country in the construction sector.
Figure 8: The costs for common construction laborers have drastically increased over a 5-year period. Source: CoreLogic 2024
Preparing for 2024 & Beyond
There is a growing property risk crisis in the U.S. More homes are built every year and the cost to repair is increasing due to the inflationary pressures on all industries across the country. When combined with a historically active severe thunderstorm season, the losses could be substantial.
High quality input data is the foundation of effective underwriting, pricing, and risk management strategies. From an accurate assessment of what is on the ground — such as structure-level building characteristics that comprise CoreLogic’s nationwide property database — to realistic representations of real-world meteorological activity — such as the data captured by CoreLogic’s Weather Verification Technology used in this report — having confidence in data accuracy is the difference between resilience and catastrophe.
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