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US winter storms bring first quarter 2021 losses

April 20, 2021

US winter storms bring first quarter 2021 losses

A spate of severe winter storms brought record-breaking low temperatures to much of the U.S with snow, ice, and power blackouts. More than 200 million people were under some form of winter weather warning during the events.

The separate winter storms were:

  • Ice storm “Shirley” from 10 to 11 February which caused heavy snowfall and property damage to southern US States including Ohio and Texas;
  • “Tabitha” from 11 to 14 February in the northwest of the USA - Virginia being particularly affected;
  • "Uri" from February 13 to 17, particularly affected the deep south states of the US such as Texas;
  • "Viola" from 15 to 20 February which compounded the effects of Uri and caused further damage.

Media coverage catalogued the intensity of the weather and the widespread extent of the damage to domestic and commercial properties in areas normally spared such events.

These will be complicated claims to adjust for the US carriers; some of the flood claims from burst pipes will not be covered; subrogation against the power companies is likely. Further information is available from Guy Carpenter’s CAT-i-Bulletin here

Winter storms are challenging to model, both due to their meteorological complexity and the different perils possible within each storm. Catastrophe loss modeller Karen Clark & Co (KCC) has published estimates based upon their models of US$18bn of insured damage from “Uri”. KCC’s loss estimate includes home, auto, commercial, industrial, and business interruption lines of business, with the majority expected to be commercial. According to KCC, the loss covers 20 states in the U.S., with over half of the total in Texas.

There is too much uncertainty at present for any syndicate writing this business to know what the effect will be from these storms; syndicates will certainly pick up some of the industry losses via their US property insurance books and possibly from their reinsurance of US carriers: the insurance losses will probably land on the 2020 Account and the reinsurance losses are more likely to affect the 2021 Account.

[Picture of "Uri" from NOAA]