Two winter storms that struck the United States in early 2026 are expected to push first-quarter catastrophe losses above historical averages, ratings agency AM Best has said, though most of the financial burden is likely to fall on primary insurers rather than reinsurers.
In a commentary, AM Best said insured losses from Winter Storm Fern and Winter Storm Hernando would "carve into 1Q 2026 earnings," but indicated the industry should be able to absorb the impact.
Flash estimates from catastrophe modelers Karen Clark & Co. and Verisk placed insured losses from Fern between $4 billion and nearly $7 billion. The storm affected more than 30 states beginning Jan. 23, bringing snow, ice, and prolonged freezing temperatures.
Verisk noted that Fern could rank as the third-costliest winter storm in US history, behind Winter Storm Uri in 2021 and Winter Storm Elliott in 2022.
Freeze-related damage, including burst pipes and power outages, drove the bulk of claims. Commercial properties are expected to account for a significant share of losses, as average claim amounts tend to be higher and heating systems are often shut down outside business hours. Losses were concentrated in southern and southeastern states, including Texas and Tennessee.
Preliminary estimates for Winter Storm Hernando, classified as a bomb cyclone and nor'easter that struck the East Coast from Maryland to Maine, were still being calculated at the time of AM Best's commentary.
The elevated catastrophe losses come amid a broader upward trend. Swiss Re research has found that global insurance losses from natural catastrophes have followed a 5-7% annual growth rate in real terms in recent years.
Munich Re's NatCatSERVICE data showed that North American insured losses in 2025 totaled approximately $93 billion, above the 10-year average of $83 billion. Gallagher Re has separately estimated that US insured catastrophe losses in 2025 were roughly 12% above the 10-year average.
State Farm, which holds an 18.20% share of the US homeowners' market based on 2024 NAIC data, appears most directly exposed. The insurer said in early February that it had received more than 20,000 home and auto claims from Fern as of Feb. 9.
AM Best's Sridhar Manyem said improved enterprise risk management practices across the property and casualty sector have bolstered the industry's resilience. The agency added that because the two winter storms are being treated as separate events, reinsurance triggers are unlikely, and the financial impact should remain largely contained within primary carriers.
