The contribution of climate change to Europe’s increasing hail losses

Losses from hailstorms are increasingly affecting the re/insurance industry, with exceptionally high losses from the hail peril in France in 2022 and Italy in 2023. New scientific studies indicate that climate change may be driving modifications in atmospheric conditions, leading to more frequent large hail events.

We developed our new hail model for insurance losses in Europe by combining the AR-CHaMo dataset (Battaglioli et al., 2023) with radar data from the German Weather Service. By correlating hail probabilities to the area covered by thunderstorms in the radar data, we have created 100 plausible versions (stochastic simulations) of each day from 1950 to 2022, leading to a fully stochastic event-set with 7,300 years and about 80 million hail footprints over Europe.

Using this newly developed model, we investigate the annual aggregated insured loss for 1950-2022 per country and find that hail losses have increased by 0.8-1.7% per year (with lowest increase for Germany and the largest for Italy) due to the underlying trends in the reanalysis predictors of hail probability.

This analysis shows that climate change might be an important contributor (an estimated 20% to 55% of the total) to the annual expected change in risk of loss, compared to other changing risk factors such as exposure and inflation.