Verisk is the second of the catastrophe risk modelling specialists to release an estimate for insurance industry losses caused by recent winter storm Fern in the United States, saying the total could reach $4 billion.
Verisk said that early results from its updated U.S. Winter Storm Model suggest 14 states, from Texas to Massachusetts, could exceed $50 million in insured losses each and that if estimates hold, Fern would become the third costliest U.S. winter storm on record, behind Winter Storm Elliott (2022) and Winter Storm Uri (2021).
Verisk’s estimate of US $4 billion in industry losses from winter storm Fern can be compared to Karen Clark & Company (KCC) who earlier pegged private insurance industry losses from winter storm Fern in the US at $6.7 billion, with estimated losses the highest in Texas and Tennessee.
That was meaningfully higher than early indications, as many in the industry had suggested storm Fern may only result in around $2 billion in industry losses to us.
Verisk’s estimate may therefore be considered more likely to prove accurate. But, as ever, with freeze related events it can take time for the full quantum of losses to be understood for the insurance and reinsurance industry.
For further reference, insurance and reinsurance broking group Aon reported last week that Fern is expected to cause insurance market losses of more than one billion dollars.
And, as we wrote last month, investment manager Twelve Securis had warned that the winter storm event and freezing temperatures could contribute to the gradual erosion of aggregate limits in certain catastrophe bonds.
