Newsletter Sign-up

By JON CAMPISI, a writer and editor for media outlets in the Philadelphia area.

What was once thought to be a hard-and-fast geographical designation of inclement weather patterns across a specific swath of the Unites States has changed.

Tornado Alley is a swath of land between the Rockies and the Appalachian Mountains. Tornadoes are concentrated in the Great Plains states of Texas, Oklahoma, Kansas, Nebraska, Colorado and the Dakotas.

The high frequency of tornadoes that last year devastated many Midwestern states, such Arkansas, Mississippi, Alabama and even Virginia, shows Tornado Alley may be expanding. At the very least, the risk concentrations for tornadoes are changing, CoreLogic experts said.

"The extensive destruction wrought by convective storms in 2011, which produce hail, strong winds and tornadoes, captured the attention of the public and forced many insurance companies to rethink the way they assess natural hazard risk," Howard Botts, vice president and director of database development for CoreLogic's Spatial Solutions, said in a company news release. "The apparent increase in the number of incidents and shift in geographic distribution of losses that occurred last year in the U.S., called the long-held notion of risk concentration in Tornado Alley into question, and is leading to changes in risk management policy and procedure."

The report's key findings include the fact that there is growing scientific evidence suggesting the increase in the number of severe weather outbreaks is the result of rising temperatures, and that actuarial analyses of claims losses relating to severe weather events in 2011 will likely lead to rate changes on the part of insurers and risk managers.

The report also states that tornado risk actually extends across much of the eastern half of the U.S. rather than just the Midwest; at least 26 states are, in some way, at an extreme risk for tornadoes. Property damage estimates between 2000 and 2011 within the six states that traditionally make up Tornado Alley were actually much less than damage estimates coming from outside the Alley. CoreLogic put the former at $2.5 billion and the latter, comprising 16 states, at $15.5 billion for the 10-year period.

The report states that while insurers have historically focused on earthquakes and hurricanes, they are now altering their outlook.

The insurance commissioners in three states -- California, Washington and New York -- now require insurance companies to disclose response plans for a wider range of natural risks like severe storms and changes in sea level. Record-breaking severe weather outbreaks and destruction, especially in 2011, have changed how insurers define high-risk areas beyond Tornado Alley, the report also said.

"Insurers are now placing particular emphasis on improving their understanding of the geographic distribution and frequency of tornadoes and hail storms, which in turn provides a more accurate and complete analysis of risk potential," the report's conclusion states. "As more precise geospatial hazard risk modeling is used to fine tune this risk analysis, the way in which policies and rates are constructed will be affected.

"Insurance companies, enterprise risk managers and even state Departments of Insurance are becoming more attuned to changing climate conditions, population dispersion and new patterns in hazard-related losses," the report said. "The result will continue to be more accurate predictive risk analysis leading to better-informed decision making within the insurance industry."

April 2, 2012

Copyright 2012© LRP Publications