Insured losses to residential, commercial, industrial properties and their contents and to automobiles from the U.S. winter storm which struck on February 1st – 2nd could reach as much as $1.4 billion according to risk modelling firm AIR Worldwide. AIR estimated anything between $790m and $1.4 billion, we believe it’s likely to be in the upper half of that estimate as reports of damage are still coming in and much of the claims are only now being filed.
The storm was one of the largest winter storms to hit the U.S. since the 1950’s and affected around 100 million people across 30 states. Upwards of a foot and a half of snow fell in some areas along with high winds, sub-zero temperatures and freezing rain and ice. Air pressure was a major factor in the intensity of this storm, with unusual high pressure following the storms low pressure cyclonic centre.
“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,” said 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.”
Record snow accumulations have now been seen in New York and New Jersey this year, both of which are largely commercial areas and the loss to businesses income could be huge. The weather experienced this winter in the U.S. may encourage use of weather risk transfer techniques such as snowfall derivatives and temperature derivatives next year.