Another tough first quarter is in store for insurers when it comes to catastrophe losses—though not as severe as a year ago from the California wildfires.
According to industry rating agency AM Best, insurance losses from the two major wint
er storms in so far in 2026 “will contribute to a meaningful decline in underwriting profits” for the first quarter.
The combined losses from Winter Storm Fern late in January and more recently Winter Storm
Hernando will affect homeowners, commercial property, and auto insurers most, with business interruption losses from closures and flight cancellations adding to the loss tally.
While insured losses from Hernando’s record snowfall and power outages are not yet unde
rstood, insured-loss estimates from Fern are between $4 billion and $7 billion.
In a recent commentary, AM Best pointed out that Fern was concentrated in the Southeast while Hernando impacted the Northeast, where there are signific
antly more commercial and residential structures of greater value. This could cause a “moderate impa
ct to aggregate earnings,” though not as much as the Los Angeles wildfires a year ago, AM Best noted.
Losses from the two events should be absorbed by primary insurance carriers, with less impact on reinsurers, AM Best added.
Looking at the Northeast region, the top homeowners insurer is State Farm with nearly 17% m
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arket share. The insurer also has about a 15% market share in auto along with Progressive.
Consolidated net premiums written (NPW) increased 8.9% to about $13.1 billion. P/C net premiums were up 7.7% and life insurance increased NPW about 17%.
For the full year 2025, Chubb absorbed an increase in pretax catastrophe losses compare
d with 2024—$2.9 billion versus $2.4 billion. However, P/C underwriting income finished 2025 up 11.6% to a record $6.5 billion and a combined ratio of 85.7, which was another record.
Total pre-tax favorable reserve development for 2025 was $1.1 billion compared with $856 million for 2024.