In a recent AM Best article, Shawn Crawley, Sompo International Senior Vice President of First Party Claims and Global Claims Catastrophe Lead, commented on the impacts and industry losses incurred from the Texas freeze. “In some estimates, the combined effect of winter storms and severe convective storms throughout the year have become the most damaging peril in the U.S,” he said.
AIR Worldwide reported that the storms, which impacted more than 70% of the continental United States, will cause industry insured losses of more than $10 billion and noted that, “there are several factors that could still drive the loss well in excess of the $10 billion figure, among those a higher-than-expected rate of claims among risks affected by prolonged power outage, whether utility service interruption coverages pay out, large impacts from demand surge, government intervention, and whether claims from mold damage start to emerge as a significant source of loss.”
Of the impact to carriers, Crawley said they should expect numerous business interruption claims, the degree of losses influenced by the severity of physical damage and property restoration market response capabilities as resources are stretched thin.