Risk briefing: preparing for a record-breaking tornado season

The expert team of long-range forecasters at AccuWeather is predicting 1,250 to 1,375 tornadoes across the United States in 2024. This is above the historical average of 1,225 twisters annually.

The forecaster says that spring weather patterns will promote more severe weather in Tornado Alley, which spans from Texas through Nebraska, adding that Tornadoes could also spin up more frequently in California this year. 

It says that the Great Lakes, the Gulf of Mexico, and the return of La Niña will be the major factors that set the 2024 severe weather season apart from 2023.

We’ve already seen evidence of the damage that 2024’s severe tornados can wreak on businesses.

In March, a series of deadly twisters tore through the central U.S. with Indiana’s EF-3 tornado being the strongest so far, causing widespread devastation in its wake.

For instance, more than 2,600 properties and structures were damaged or destroyed in Little Rock, AR. The Apollo Theatre in Belvidere, Illinois - a 100-year-old building suffered major roof damage due to hail and winds of up to 50mph.

The annual frequency of tornadoes in the U.S. has remained relatively constant, according to the most reliable records.

However, recent data indicates a concerning trend as damages have been much more intense. For instance, the NOAA says that in 2023 alone, twisters caused $1.2 billion in property damage.

What does it mean for risk managers?

Organisations can’t afford to ignore the urgent need for robust business continuity and disaster recovery strategies this tornado season. 

AccuWeather’s chief meteorologist Jon Porter says businesses need to prepare now, and must not presume that they are protected just because they are located in a historically safe location.

He explained: “We’ve seen with climate change that severe weather threats, including tornadoes, are happening outside of the time of year and places that people typically associate with tornadoes. Do not be lulled into any false sense of security. There can be a tornado threat anywhere in the country with the right conditions.”

Fusion Risk Management’s senior advisory consultant, Steve Greenstein, added: “Surprisingly, Ohio has surpassed Tornado Alley states like Kansas, Oklahoma, and Texas in tornado activity. This highlights the need for a proactive risk response to address the impact of climate change on tornadoes in changing geographies.”

Against this backdrop, organisations must address climate change and the potential for severe adverse impacts that disasters could inflict upon their physical, operational, and technological infrastructure, ranging from disruptive damages to catastrophic destruction.

Greenstein said: “Ignoring these potential consequences places organisations at higher risk for failure, increasing financial, operational, compliance, and reputational impacts.

“Developing a culture and program of operational resiliency will safeguard organisations from these potential impacts and protect their core assets, enabling continuity and resilience regardless of any disruption.”

How to manage the threats

It is imperative that risk managers start building resilience across supply chains and collaborate on policy, legal, technology, and market changes to effectively address the mitigation and adaptation requirements associated with climate change.

The nature, speed, and focus of these changes may introduce transition risks that can pose varying levels of financial and reputational risk. It is therefore crucial for risk managers to establish a robust process for identifying, measuring, monitoring, and controlling the material financial and operational risks linked to climate change.

Greenstein said: “This process should encompass a comprehensive framework that involves the active involvement of an organisation’s board of directors in overseeing these efforts.”

Organisations can safeguard their financial stability and reputation by proactively addressing climate-related risks, but this requires a strategic approach. Firms should integrate climate risk management into the overall risk management framework, ensuring that the business is well prepared to adapt to the evolving landscape of climate change.

Greenstein concludes: “As risk managers, it is our responsibility to champion this initiative, working collaboratively with stakeholders across the organisation to embed climate risk considerations into decision-making processes. By doing so, organisations can enhance their resilience, seize opportunities, and maintain their competitive advantage in a rapidly changing world.”