Winter Storms Fern and Hernando Expected to Impact Q1 2026 Insurer Earnings

Billions in Insured Losses Anticipated from Early 2026 Winter Storms

Two significant winter storms that swept across the United States in the first quarter of 2026 are projected to substantially impact the earnings of property and casualty insurers. The storms, identified as Winter Storm Fern in late January and Winter Storm Hernando in late February, generated billions of dollars in insured losses through widespread snow, ice, power outages, and property damage across multiple regions.

Winter Storm Fern's Broad Impact

Winter Storm Fern, active from January 23 to January 27, 2026, affected a vast area stretching from Northern Mexico through the Southern and Northeastern United States, and into Canada. More than 30 U.S. states were impacted by the storm, which delivered deadly ice and snow. Initial estimates for insured losses from Fern varied, with Karen Clark & Company (KCC) placing figures around $6.7 billion. Verisk's catastrophe and risk solutions group indicated insured property and automobile losses could reach up to $4 billion, while Aon reported at least $1 billion in insured losses. Moody's Ratings' Vice President and Senior Credit Officer, Jasper Cooper, stated that insured losses from Winter Storm Fern would be in the billions of dollars.

The storm prompted a significant number of claims, with State Farm reporting over 19,500 home and automobile claims. USAA also received more than 5,000 claims related to Fern and a subsequent nor'easter. The primary causes of loss included

• snow and ice accumulation
• water damage
• wind damage
• frozen pipes

AccuWeather estimated the total damage and economic losses from the broader weekend winter storm event, likely encompassing Fern's extensive reach, to be between $105 billion and $115 billion.

Winter Storm Hernando Strikes the Northeast

Following closely, Winter Storm Hernando, also known as the Blizzard of 2026, impacted the Northeastern United States from February 22 to February 24, 2026. This historic blizzard brought extensive snowfall, with some areas receiving 2 to 3 feet of snow, alongside blizzard conditions, strong winds, and coastal flooding. The storm led to more than 600,000 power outages and over 10,000 flight cancellations. States of emergency were declared in seven states, including New Jersey, New York, and large portions of New England. While preliminary insured loss estimates for Hernando are still being calculated, AM Best anticipates them to be material for individual insurers.

Industry Outlook and Management

AM Best noted that while the combined insured losses from both storms are expected to make the first quarter of 2026 an 'above-average quarter' for insured losses, the property/casualty industry is expected to manage the impacts effectively. This resilience is attributed, in part, to more effective enterprise risk management practices. Insurers and reinsurers are closely monitoring these early-year events as they assess their 2026 catastrophe budgets and retentions ahead of the main U.S. convective storm and Atlantic hurricane seasons. The largest share of insured losses is anticipated to come from commercial property lines, followed by homeowners and personal auto.