In the past few weeks, many industry analysts have expressed concerns about the ways in which the impact of repeated winter storms and intensely cold weather would end up affecting the bottom lines for property and casualty insurance companies, but new data suggests that these won’t be nearly as severe as some might have initially expected. This may be good news for agents, who might still have to deal with massive numbers of troublesome claims.
With that having been said, it seems that the winter weather that hit much of the East Coast and Upper Midwest between Jan. 1 and Feb. 21 led to approximately 175,000 claims from P/C policyholders, according to a report from the Insurance Journal. Altogether, the Insurance Information Institute projects that these issues could end up costing such companies as much as $1.5 billion, making it the fifth-costliest winter weather period seen over the last 34 years.
However, Fitch Ratings recently issued a report saying that the continued impact of these cold weather and winter storm problems might take a little bit longer to sort out than all that, because the various costs snow damage and other issues might take a while to completely calculate, the report said. Some companies have already noted that their losses are in the hundreds of millions of dollars each, pre-tax, and if more losses can be expected, that could further drive up loss expectations.
A broader impact has been observed
Of course, it’s not just the insurance industry that has observed a notable hit from the all this difficult winter weather, the report said. It seems that consumers are now spending less as a result of being cloistered in their homes over the last several weeks, and that has had an impact on the economy as a whole. As such, it might take a little bit longer for insurers, and other businesses as well, to get their feet back under them; one estimate shows that this issue might have cut the U.S. GDP by as much as half a percentage point in the first quarter alone.
It’s important for insurance agents to keep a close eye on any claims they might see in the coming months simply because of how troublesome this winter weather has been for homeowners and businesses alike, as well as the fact that it could take them a while to fully assess the damage they suffered as a result.