Written by: Daniel Grimwood-Bird, Chief Revenue Officer at MAPTYCS
We often hear this phrase in headlines and especially in insurance and risk circles: “The frequency and severity of severe weather is increasing.”
It’s a statement that feels intuitively true. But recently, I’ve been reflecting on the idea of “severity”, what’s actually driving it, and whether our terminology is helpful to the wider understanding for non-insurance folks. What do we really mean when we say an event is more severe? Is it the size of the storm? The length of the recovery? The dollar value of the damage left behind? Or something else entirely?
When we, as the insurance industry talk about severity, we’re talking about how much it costs. A CAT 5 Hurricane that barrels through a low-density area won’t be as severe as CAT 2 that hits a major metro area. So, are events getting more severe?
Yes, climate change is a factor. There’s broad agreement that warmer oceans, changing weather patterns, and a shifting atmosphere are making certain weather events more extreme. Hurricanes are packing more power. Wildfires are occurring out of season and driven further and faster by extreme weather. Droughts are lasting longer. But that’s only part of the story.
Severity isn’t just about how strong the wind blows or how much rain falls. It’s also about what stands in the path, and how much it costs to rebuild. And in today’s world, what stands in the path is a lot more than it used to be.
More people, more property, more exposure – we’ve made the bullseye bigger.
Let’s take the Gulf Coast as an example. In 1960, around 4.5 million people lived in counties along the Gulf of Mexico. By 2008, that number had surged to roughly 14 million. That’s more homes, more infrastructure, and more insured assets sitting in high-risk areas. Source: U.S. Census Bureau
The urban sprawl into coastal zones, floodplains, and wildfire-prone regions has significantly increased exposure. People are drawn to these areas for lifestyle, climate, or economic reasons, but that also means we’re placing more value in harm’s way.
So, when a storm hits today, even if it’s the same strength as one fifty years ago, the potential for economic loss is dramatically higher. Simply put, there’s more to lose. And with more at stake, even moderate weather events can have outsized financial and societal impacts.
The cost of rebuilding keeps rising – and tariffs won’t reduce that.
It’s not just about how many people live in risky areas. The cost of putting things back together has skyrocketed. Materials are more expensive. Costs of labour are in constant increase, on average 4.5% higher from 2023 to 2024, mostly driven by external inflationary pressures on individuals. Supply chains are more complex, and more fragile.
Here’s a striking data point: in 1990, the average cost to build a new single-family home in the U.S. was about $149,800. Adjusted for inflation, that would be around $345,928 today. But the actual average cost in 2024? Roughly $428,000. That’s an additional $82,072 in cost per property, driven not by currency inflation, but by rising material prices, regulatory compliance, and supply chain pressures. Source: Madison Trust
Add to that the potential impact of recent U.S. tariffs on steel, aluminium, and other key imports, and it’s easy to see how rebuilding after a disaster could become significantly more expensive. Builders will face increased costs due to these tariffs, which will be passed on to insurers, further driving up the price of repairs. Source: MarketWatch
A roof isn’t just a roof anymore. It’s a blend of materials sourced globally, priced in dynamic markets, and installed by a shrinking pool of skilled tradespeople. These economic factors all amplify the severity of a loss.
The same storm in 2025 might generate a significantly higher insured loss than it would have in 1995, not because the storm is more intense, but because the world it’s hitting is more expensive (I’ve also purposely left the impact of litigation out of this, that’s a subject for another day).
Frequency is in the eye of the beholder.
To touch on the frequency element of the equation, frequency of severe weather will have an impact on the aggregate severity of a year, but are events more frequent? Our tools for detecting, measuring, and modeling weather events have improved drastically. Satellite imagery, IoT sensors, geospatial data, and advanced analytics allow us to track storms in real time and assess damage with unprecedented accuracy.
We see more, we track more, and we report more. That can give the impression that we’re experiencing more frequent events, when in some cases, we’re just seeing the full picture for the first time. In decades past, a flash flood in a remote area might have been a footnote in a local newspaper. Today, it’s logged, modeled, and instantly shared.
This visibility is critical for improving preparedness and response, but it also adds to the perception of an escalating crisis. In other words, our awareness has increased alongside the actual risks.
Severity is about more than the storm.
So, is severity increasing?
Absolutely, but not just because of Mother Nature.
It’s a combination of climate volatility, population growth, urban development, economic inflation, and global policy. They all contribute to why disasters feel heavier, and losses are bigger.
When we look at the numbers in isolation, it’s easy to assume that storms are getting worse. But when we zoom out, we see that the environment these storms strike is changing too, sometimes more dramatically than the weather itself.
A moving target for risk professionals
For those of us in risk, insurance, or disaster preparedness, it’s important to think beyond the storm itself. We have to consider the context into which it lands. That context includes rising land values, infrastructure density, policy decisions, and even demographic shifts.
This is where tools like MAPTYCS® come into play, helping organizations understand not just where they are exposed, but how that exposure is evolving in a changing world.
The question isn’t just “How bad is the storm?”
It’s also “What kind of world is the storm hitting?”
And that world, more than ever, is a moving target.
