Total insured losses from two significant U.S. winter storms in 2026 are expected to carve into first-quarter earnings of property/casualty insurers; however, AM Best expects the industry segment to be able to manage the impacts.

In its Best’s Commentary, “Losses From Winter Storms to Carve Into 1Q 2026 Earnings,” AM Best notes that although preliminary insured loss estimates are still being calculated for Winter Storm Hernando, the total is anticipated to be material for individual insurers given the record snowfall and widespread power outages and travel disruptions. Combined with Winter Storm Fern, for which insured loss estimates have ranged between $4 billion to $7 billion, the first quarter of 2026 will prove to be an above-average quarter in terms of insured losses, albeit not as costly as the California wildfires of January 2025.

“More-effective enterprise risk management practices played a large role in the property/casualty industry’s resilience in 2025 despite the heavy first-quarter losses from the California wildfires and other weather events, and this should continue in 2026,” said Sridhar Manyem, associate director, Industry Research and Analytics, AM Best.

Unlike Winter Storm Fern, which was concentrated in southern states with infrastructure less prepared to weather winter storms, Hernando primarily impacted the northeastern United States, where wintry conditions are more expected. However, according to the commentary, significantly more commercial and residential values are prevalent in the areas impacted by Hernando, which could cause losses to be material.

“As Winter Storms Fern and Hernando are considered separate and distinct events, each should be contained within the primary carriers; consequently, reinsurers will likely face lesser impacts,” said Helen Andersen, industry research analyst, AM Best.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=362770.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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