Insurance company execs most concerned about severe convective storms

NEW YORK, Nov. 17, 2025 /PRNewswire/ -- Insurance company executives consider severe convective storms to be the No. 1 peril by impact to their organizations' balance sheets, a recent survey found.

The survey, commissioned by reinsurance MGA Demex, was distributed to American Property Casualty Insurance Association (APCIA) members during summer 2025. Responses were supplemented by three complementary questions asked of National Association of Mutual Insurance Companies (NAMIC) Convention 2025 attendees.

Asked to rank perils that most impact their company's annual earnings after reinsurance recoveries, respondents listed SCS at the top, followed by: fire, other than wildfire; natural catastrophes such as hurricanes and tropical storms; wildfire; and flood. Eighty-seven percent of survey respondents were significantly, or somewhat, concerned over future SCS losses.

Respondents from both NAMIC and APCIA also indicated traditional reinsurance was their primary risk transfer option for SCS losses. Sixty-three percent of APCIA respondents stated they would, or may, purchase aggregate working-layer cover if it was accessible, with 49% of NAMIC respondents saying they were investigating, or may investigate, this option.

With rating agency Moody's and other insurance industry observers reporting that reinsurers are maintaining high attachment points, primary insurers will continue to retain significant losses from frequent SCS events, if they solely utilize traditional reinsurance solutions.

The findings indicate there appears to be a disconnect between what insurers see as their biggest peril and their lack of implementing effective risk transfer options.

Speaking at a webinar to launch the survey, Jim Botsis, Head of the Chicago Office for reinsurance broker AcrisureRe, added, "Obviously, insurance companies can go out and buy a traditional, property catastrophe tower to protect them against the severity of an individual loss. But, the concern has always been what happens to all the net losses that a company can take, where it may be eroding their surplus."

Adding, "It is about making sure that you take your entire reinsurance program,and put it together as a puzzle so it works in a number of different ways for you."

At the same event, the CEO of mutual insurer, Innovated Holdings, Jake Black said: "It is important to become more and more familiar with the products available. I think you could put Demex's SCS reinsurance solution in your reinsurance stack a million different ways. It could just become the icing and sprinkles on top of the cupcake of what you're doing with your traditional reinsurance program. Or, you could take the opposite look and say, maybe the Demex solution is the meat of my reinsurance program, and I'm going to go off the more consistent modelling it has, and put more traditional solutions on top of this one."

Summing up the survey findings and the apparent disconnect, Matt Coleman, Chief Risk Officer of Demex, stated: "Severe convective storms continue to hit the revenue and balance sheets of primary carriers hard. However, it does appear there is either a reluctance to utilize, or lack of awareness of, the risk transfer options that sit below carriers' cat treaties to protect them from accumulated convective storm losses. There are solutions out there, and Demex is proud to be leading the innovation in this space."

Respondents from APCIA member companies represented functions ranging from the C-suite to underwriting, sales, reinsurance, loss control, claims and actuarial, with twenty percent in c-level positions.

The full report can be downloaded here and a replay of the webinar can be viewed here.