Product Family

Protecting business from wild, convective weather patterns


Senior Underwriter, North America Property, AXA XL

From the first signs of spring until well into November, stormy weather can crop up at any time. Convective storms – those that are caused when warm, moist air rises and condenses into cumulus clouds – can cause damaging winds, hail and tornadoes. In a changing climate, we expect the patterns of these storms to change too. 

In fact, there were 5,396 major hailstorm events in 2019, 1,676 tornadoes, and 16,064 recorded wind-related storm events. 2019 also saw a fairly active North Atlantic hurricane season, with 18 named storms, 6 hurricanes, and 3 major hurricanes.

The damage totals from such storms are not hard to find. When it comes to hurricanes, for example, Atlantic-based hurricanes in 2019 are estimated to have caused $22 billion in damages in the US.

However, losses associated with inland hurricanes, or derechos, are a bit tougher to locate. Yet within the first eight months of 2020, seven recorded derecho events wreaked havoc in over a dozen states. A derecho that hit the state of Iowa in early August 2020, stretching over 770 miles and lasting nearly 14 hours. The line of storms caused an estimated $4 billion in damages, including weeks-long power outages across the state.

NASA scientists believe the worst is yet to come. Studying weather data from 1993 to 2012, the NASA team found that extreme storms formed when sea surface temperatures topped 83 degrees Fahrenheit. While uncertainty is large, projections suggest that it may be possible extreme storms may increase by 60 percent by the year 2100.

For businesses large and small, such risks can be devastating. Buildings, roofs, and everything contained by them could be damaged or destroyed should a flood, tornado, or even hailstorm hit. For manufacturers, this could mean a costly interruption in operations or worse, the inability to resume operations until repairs or replacements are made.

Innovations in modeling have allowed insurers to identify a good portion of the storm risks in any given region.

Data-driven Prevention
Fortunately, innovations in modeling have allowed insurers to identify a good portion of the storm risks in any given region. In the past, modeling was mostly used for hurricane and earthquake events. However, storms containing wind and hail are more frequent, and losses rival those of hurricanes.

Looking at historical data, underwriters are able to see patterns, such as which areas have experienced higher instances of hailstorms, which areas are more susceptible to windstorms, or which areas see the most tornado activity. In these high hazard areas, insurers are able to collaborate with insureds to help lessen the degree of their risks and help them plan for weather-related events.

For example, a manufacturer whose facilities are situated in an area of high hail or tornado probability could take steps in advance of any storm to reduce damages and prevent business interruption. Because convective storms, like tornados and hail, impact roofs, a hail-damaged roof can cause water penetration and damage or destruction of costly equipment or warehoused supplies. Conducting assessments of a roof prior to any storm can determine the age of the roof, condition, and potential impact that hail or wind could have on it.

In fact, a Risk Engineering Survey or Risk Engineering Assessment of the property can identify other areas of impact, as well, such as if the property is located in an area that could be significantly impacted by a wind or rain event. An assessment can reveal whether a property is located in a flood-prone area or susceptible to run-off from higher elevations. Also, assessments can determine if the buildings are in good repair and have been properly maintained or if there is any loose siding or cracks in masonry.

From there, companies can determine maintenance and repairs or replacements ahead of any convective event. Replacing an aging roof with a roof system that is more impervious to the elements, for example, could reduce the risk of water-related damage to the contents of the building. That in turn could reduce the risk of business interruption.

Contingency Planning
Yet even with preventive measures in place, businesses can still be impacted by outages and/or loss of equipment, supplies, or suppliers. For that reason, a company’s prevention planning should include a contingency plan. A well-conceived contingency plan can help businesses get up and running again within days of a major convective event, rather than weeks or even months.

A good contingency plan should include the following:

Immediate response plan. When a convective event occurs, know who will respond, and what the response will entail. Typically, the response will include an inspection of the facilities to determine the feasibility of restarting operations. The response should evaluate what has been impacted – suppliers? Distribution? Equipment? Access or use of building?

Alternative operations plan. Should there be damage to the property, where will operations move to? Locate and vet a few alternative locations that could serve as temporary sites until your main location is remediated. Another consideration is how long you might be operating from that location. Is the facility you chose able to accommodate your operations for up to a year, possibly longer?

Also consider what you would do if one or more suppliers or distributors were impacted. Vet alternative sources now and keep them abreast of your plans moving forward. Locate a few vendors so that if one is unable to meet demand, you will have alternative sources.

Business restart plan. When a convective event cripples your current location and operations, being prepared to restart in a new location can reduce greatly any business interruption. Plans should address these questions: How will you move your operations to the alternative location? Do you have the necessary services located and locked in so that you can make the move swiftly?

When you get to your new location, make sure to consider how much staffing will be required to set up the new facilities. Vetting the facilities ahead of time allows you to draw up plans for where everything will be – supply storage, finished product warehousing, equipment setup, and deliveries.

Strength Against the Storm
With climate change increasing our uncertainty about these storms, it makes sense for businesses to prepare as much as possible for a weather-related event.

There is no definitive way to eliminate the risks to your business and your operations that convective storms bring. There are, however, ways to protect the buildings and property that can reduce your exposures. Inspect your property for possible repairs and maintenance issues and look into upgrading roofing systems. Examine property to identify potential flood or hazardous materials exposures, and work toward reducing or eliminating those risks.

Knowing what’s at risk is the first step to protecting your business from costly losses. That, plus a solid contingency plan, can help your business get back up and running after the storm.

About the Author
Based in Dallas, TX, Kyle Marti is a senior underwriter on AXA XL’s North America Property insurance team. He can be reached at

To contact the author of this story, please complete the below form

Invalid First Name
Invalid Last Name
Country is required
Invalid email
Invalid Captcha

Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

US- and Canada-Issued Insurance Policies

In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following AXA XL surplus lines insurers: XL Catlin Insurance Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor Insurance Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.