Winter storm Fern, the ice-and-snow system that swept the US over the weekend, is now expected to generate insured losses well into the billions of dollars, industry analysts suggest, after the event delivered exactly the kind of prolonged deep freeze and catastrophic icing they had warned about.
The winter storm brought "cold and ice over much of the same population impacted by winter storm Elliott in December 2022," Howden Re said in its Cat Watch. That winter storm caused more than $7 billion in loss mainly driven by extreme cold and not precipitation. As Fern moved from the Plains into the South, Midwest and Northeast, it was expected to impact more than 220 million people across at least 34 states, according to a report from BestWire.
Damage evident
BMS Group senior vice president and senior meteorologist Andrew Siffert said in an online post that the event will likely leave billion-dollar insured losses in its wake.
"Property damage from these types of winter ice storm events can come from the weight of ice... and this much ice accretion will surely cause tree limb fall," said Siffert.
As of Jan. 25, more than 720,000 households nationwide had lost power as thick ice brought down trees and lines from Texas and Louisiana through Mississippi and Tennessee and into the Mid-Atlantic. Airlines canceled more than 11,000 flights over the weekend, with major hubs from Dallas-Fort Worth to New York and Washington, D.C. heavily affected, BestWire said.
The National Oceanic and Atmospheric Administration (NOAA) said the event was unusually large and severe, bringing "significant snow and ice accumulations and frigid weather" that caused power outages and icy roads to linger longer than usual after the storm passed.
Meanwhile, power outages could lead to frozen pipe claims, given the forecast for lingering cold, Siffert said. "This will then lead to secondary effects, including additional living expenses and business interruption," he added.
Uri-like cold snap
According to Siffert, the winter storm benchmark event is Uri in February 2024, but he does not foresee the same level of losses. At the time, Karen Clark & Co. co-founder and CEO Karen Clark said insured losses could hit $18 billion.
Meanwhile, Siffert said that the good news for the insurance industry was that cold-weather outbreaks are "foreseeable."
"Technology is helping insurance clients with real-time alerts to identify risk, and through proactive communication with risk holders, they can often prevent these losses," he added.
