2023 Australasian Actuarial Education and Research Symposium

Colin Zhang

Macquarie University

Time trends in losses from major tornadoes in the United States

This is joint work with Stefan Truck, Chi Truong, David Pitt

Damage from tornadoes imposes substantial costs on society. This study provides an analysis of time trends in the severity of losses from tornadoes in the United States for the period 1954-2018. Based on information provided by the Storm Prediction Centre (SPC) of the U.S. National Weather Service, we create a dataset of normalized losses from tornadoes spanning 65 years. We then analyze patterns and trends in the total annual losses from tornadoes as well as distributional properties of the damage from individual tornadoes. Our approach allows us to combine observations from the period 1954-1996, when losses from tornadoes were typically reported in a range (e.g. $500,000-$5,000,000) with observations from 1997 onwards when an actual estimate of the damage for an event is provided. Our findings suggest an overall national significant decline in normalized losses from tornado events. At the country level, both the severity of damage from individual events and the total annual losses from tornadoes are seen to have reduced over time. We also find spatial variations in time trends for the damage from tornadoes: while for most U.S. states the declining trend in severity is confirmed, an increasing trend of total annual losses from tornadoes is observed for Alabama.