Winter Storm Losses Costly for Insurers

Old man winter struck insurers with a vengeance last week. According to estimates from catastrophe modeling firm AIR Worldwide , insured losses as a result of the massive snowstorm that left a wide swath of frozen destruction across much of the nation, especially in the Midwest and South, are estimated at between $790 million and $1.4 billion. Those figures reflect losses based on residential, commercial and industrial properties and their contents, and to automobiles.

The winter storm, which was one of the largest since the 1950s and affected nearly 100 million people across 30 states, dropped more than a foot and half of snow in some regions and delivered high winds, sub-zero wind chills, freezing rain and ice, AIR says.

“As is common of these storms that occur in the winter months, a large mass of very cold air followed in behind the storm’s front,” says Dr. Tim Doggett, principal scientist at AIR Worldwide. “The storm was able to form when cold Arctic air pushed south from Canada while moist air streamed north from the Gulf of the Mexico. Aside from the sheer size of the storm, the strength of the high pressure system behind this storm was also was also noteworthy. Pressure readings in Montana at the height of the blizzard were well above 1050 mb¯the type of high pressure only seen once every 20 years or so in the U.S. This high pressure, coupled with the low pressure of the cyclone, led to the overall intensity of the storm.”

States of emergency were declared in Illinois, Indiana, Missouri and Oklahoma and the National Guard was called out to help rescue stranded motorists. Oklahoma has been declared a federal disaster area. Along with Illinois, these two states were the hardest hit.

AIR reports that with the accumulation of sleet, rain, and freezing rain, many roofs have been unable to bear the additional rain-saturated snow. In and around Boston, Mass., there have been more than 70 reports of roof collapses—mostly from flat-roofed commercial structures—and more buildings have been identified as being at risk.

“While cleanup from the storm is underway, drifting is likely to continue to occur as a result of high winds, and there is still a potential for additional roof collapses,” Doggett says. “This is particularly true for light metal, long-span roofs (such as on hangars or warehouses). Engineered structures must conform to high load tolerances and damage to these structures is therefore expected to be minimal. But the roofs of marginally engineered structures can collapse under large accumulations of snow, particularly if their roofs have not been well-maintained.”