Credit rating agency Fitch Ratings expects Winter Storm Fern to cause $4 billion to $7 billion in insured losses, with major insurers ready to absorb the event, but Fitch noted the event is not large enough to reinsure for additional points.
In late January 2026, ferns caused subzero temperatures, heavy snow, and freezing rain, affecting much of the Midwest, South, and East of the United States.
Fitch stressed that this incident is significant for the property and casualty insurance industry but will not trigger a rating downgrade for individual insurers.
Fern’s estimated losses are well below the record $18 billion in insured losses from Winter Storm Uri in 2021, and the $8 billion in insured losses from Winter Storm Elliott in 2022.
“With Fern not being large enough to reach the reinsurance add-on point, losses from the storm are expected to be borne by major insurers, with catastrophic losses expected in the first quarter of 2026 remaining within industry expectations,” Fitch explained.
These expected losses for rated reinsurers/insurers will reduce near-term earnings, subject to claims exposure on homeowners, auto, commercial property and business interruption insurance, and are unlikely to impact capital.
However, the rating agency warned that Fern would have significant insurance obligations in these areas, leading to potentially higher premiums and tighter underwriting of weather risks.
“Insurers with certain products and geographic concentrations are likely to be more impacted, with freeze expected to be the largest driver of insured losses,” Fitch said. “Damages and insured losses from subfreezing temperatures will be more severe in southern and southeastern states, particularly Texas and Tennessee, as these properties are generally not built to withstand subfreezing temperatures and associated snow and freezing rain.”
Mainstream news reports have confirmed at least 140 deaths and more than 1 million utility customers without power. However, the U.S. public power system has largely avoided systemic blackouts and significant operational impacts, which helps mitigate insured losses. Fitch noted that regional grid operators and federal agencies have taken steps to maintain reliability and that overall grid reliability is stronger than during Winter Storm Uri in 2021 and Winter Storm Elliott in 2022.
Earlier this week, Verisk estimated that Winter Storm Fern would cost the insurance industry $4 billion in property and auto damage, primarily caused by freezing effects, with additional damage from wind and snow.
Catastrophe risk modeling firm Karen Clark and Company (KCC) estimates privately insured losses from Fern will be $6.7 billion.
Aon’s preliminary estimates put insurance and financial losses from the same incident at as much as $1 billion.
