Severe winds and tornadoes

Tornado (Source: Royal Meteorological Society)

Overview

A tornado is a narrow, violently rotating column of air that extends from a thunderstorm to the ground. They can destroy buildings, flip cars, and create deadly flying debris, causing extensive damages to infrastructure, homes, and businesses within minutes. Tornadoes occur in many parts of the world, including Australia, Europe, Africa, Asia, and South America; even New Zealand reports about 20 tornadoes each year. Two of the highest concentrations of tornadoes outside the U.S. are Argentina and Bangladesh. Readers can read more about tornadoes from many resources, including the NOAA Storm Prediction Center, NOAA National Severe Storm Laboratory website, and the wikipedia page of tornado.

The behavior and path of tornadoes has changed over the past few decades. In the United States, the number of tornado days per year has fallen since the 1970s, but the number of tornadoes occurring on those days has increased. This means that when tornadoes strike, they are more likely to occur in clusters or outbreaks, sometimes with 30 or more tornadoes in a single day. The extent of the season over which such tornado activity occurs is increasing as well -- they start earlier in the season. In addition, tornado outbreaks are becoming more geographically concentrated, with tornadoes occurring closer together, and their intensity has increased. Furthermore, the distribution of tornadoes has shifted eastward, placing new regions at greater risk of damage and financial loss.

Climate change is likely to amplify the observed trend in tornado activity. While current climate models are unable to directly simulate tornadoes due to their coarse resolution, researchers use metrics that assess the "environment" conducive to tornado formation based on large-scale variables like temperature, humidity, and wind. Consistent findings suggest that with future warming, the frequency of severe tornadoes is expected to increase, and the storms themselves will likely become stronger.

Implication for finance

The financial impacts of tornadoes are both significant and far-reaching. These powerful storms disrupt local economies, damage infrastructure, and interrupt supply chains, leading to substantial insured and uninsured losses. They can be especially costly in densely populated regions, such as the central and eastern United States, where large concentrations of assets are vulnerable. In fact, tornadoes are one of the highly costly severe weather events in the US -- together with other convective storms such as hailstorms and derechos, they are categorized as Billion-dollar Weather and Climate disasters. Between 1983 and 2024, severe storms—including tornadoes—resulted in over $500 billion in total losses, making them the second-largest category of weather-related disasters in terms of economic damage. In 2023 alone, tornadoes accounted for over $1.5 billion in losses across the United States.

The shifts in tornado behavior in recent decades have further amplified these financial risks. The increased frequency of tornado clusters, growing storm intensity, and an earlier onset of tornado season contribute to rising insured and uninsured losses. Projections of future tornado activity suggest that these trends will likely persist, presenting additional challenges for risk management. Governments, insurers, and businesses must adapt to these evolving risks through comprehensive financial planning. The economic damage caused by tornadoes extends beyond immediate physical destruction; prolonged business interruptions, the cost of property repairs, inventory losses, and workforce displacement often lead to extended recovery periods and escalating costs.

Data

Dataset	Description	Data Access
Severe weather events archive by NOAA	Organized severe thunderstorms archived by Storm Prediction Center of NOAA. The weather events covered include tornadoes, hail, and strong winds. The archive provides information on observation time, location (with detailed latitude and longitude), and estimated wind speed.	Access
Severe weather database by NOAA	Data for tornadoes, hail, and damaging wind, as compiled from NWS Storm Events Database. Tornado reports exist back to 1950 while hail and damaging wind events date from 1955. Information is provided on observation time, location, storm magnitude, as well as mortality, injuries, and estimated losses for property and crops. Please read the format specification for more information.	Access (Note: The CSV data files are located further down the webpage.)
Severe weather data inventory (SWDI) by NCEI of NOAA	An integrated database of U.S. severe weather records that provides access to data from a variety of sources in the NCEI archive. SWDI includes multiple search and access methods for records that cover particular time periods and geographic regions. Data are currently available in Shapefile (for GIS), KMZ (for Google Earth), CSV (comma-separated), and XML formats. Note that no additional quality control measures are taken beyond the processing that takes place during data archival.	Access
Storm Prediction Center of NOAA	The Storm Prediction Center of NOAA contains a lot of useful resources, including climatology and statistics of tornadoes.	Access
European Severe Weather Database	It is a platform that compiles reports on severe weather events across Europe, including tornadoes, hail, and flash floods. It is managed by the European Severe Storms Laboratory (ESSL) and aims to improve weather forecasting and public safety. Users can contribute by submitting reports, enhancing the database's value for research and analysis.	Access
Wind Explorer by Argonne National Laboratory	Historical and projected average wind speed values. This dataset can be used to investigate risks from wind-related hazards, or capacity for wind energy infrastructure.	Access
Storm counts by NOAA Storm Prediction Center	Storm counts provided by the NOAA Storm Prediction Center are available at both the national and state levels and are organized by month.	Access; View