‘Meaningful Decline’ in Industry Q1 Underwriting Profit Expected From Winter Storms
Another tough first quarter is in store for insurers when it comes to catastrophe losses—though not as severe as a year ago from the California wildfires.
According to industry rating agency AM Best, insurance losses from the two major winter storms in so far in 2026 “will contribute to a meaningful decline in underwriting profits” for the first quarter.
The combined losses from Winter Storm Fern late in January and more recently Winter Storm Hernando will affect homeowners, commercial property, and auto insurers most, with business interruption losses from closures and flight cancellations adding to the loss tally.
While insured losses from Hernando’s record snowfall and power outages are not yet understood, insured-loss estimates from Fern are between $4 billion and $7 billion.
Related: Winter Storm Fern to Cause Up to $6.7B in Insured Losses
In a recent commentary, AM Best pointed out that Fern was concentrated in the Southeast while Hernando impacted the Northeast, where there are significantly more commercial and residential structures of greater value. This could cause a “moderate impact to aggregate earnings,” though not as much as the Los Angeles wildfires a year ago, AM Best noted.
Losses from the two events should be absorbed by primary insurance carriers, with less impact on reinsurers, AM Best added.
Looking at the Northeast region, the top homeowners insurer is State Farm with nearly 17% market share. The insurer also has about a 15% market share in auto along with Progressive.
