Winter storm Fern, which affected the United States from January 23rd through 26th, is expected to cause insurance market losses of more than one billion dollars, while it is likely to be compared to previous historic US winter storms, broker Aon has reported.
“A large portion of losses will likely come from the southeast U.S. due to the impacts of the devastating ice storm on residential and utility infrastructure, as well as widespread tree damage.
“Prolonged cold air forecasted for much of the U.S. through early February may worsen material damages further, especially in hard-hit areas.”
Having gone through numerous deep freezes already this winter, as the polar vortex demonstrated just how volatile it can be in plunging arctic air into North America, after winter storm Fern there are forecasts for more this weekend and potentially the weekend after as well, which could exacerbate the claims situation.
In addition, some areas are struggling to get back above freezing, while there is also the prospect of melt related claims to come as well.
All of which complicates the recovery and insured claims picture, which leads Aon to suggest this ultimately might be considered a historic US winter storm event.
“While losses will continue to evolve in the coming weeks, the extensive impacts from the January 23-26 winter storm will likely rival that of previous historic U.S winter storms,” the broker stated.
Those historic top-5 US winter storm loss events range from the 2021 Texas Freeze which drove insurance and reinsurance market losses of an estimated $18.4 billion, down to the 1983 blizzard and extended Christmas freeze with insurance market losses of $2.8 billion at 2025 values.
Winter storm Fern is seen as having caused at least 65 deaths and over 1.1 million people were without power at one stage of the storm’s peak.
Widespread property, tree and powerline damage were caused by freezing rain accumulations, while the combined ice, sleet, and snow impacts led to at least 11,600 flight cancellations on a single day. There was also localised severe weather to contend with, including at least one EF2 tornado in Alabama.
With extensions of the arctic air mass expected to move back into southern states this weekend, while additional snow storms are possible, Aon notes that, “Extreme cold watches and warnings have been issued for much of the southeast U.S., including Florida which is expecting its coldest outbreak in 15 years.”
Ultimately, winter storm Fern is expected to be a complex loss situation and with the continuing freezing weather bringing all the losses together under a single event total is likely to prove challenging. But it is clear the industry faces one of the more expensive winter weather claims bills in the United States this year, which will have some relevance in reinsurance and potentially event to certain cat bonds (see our previous story).
Also read: U.S. winter storm could contribute to aggregate erosion for certain cat bonds: Twelve Securis.
