Winter Storm Uri Losses in Texas Expected in $10B – $20B Range

March 1, 2021

It’s likely that insured losses in Texas from Winter Storm Uri, which overwhelmed the state in mid-February, will climb into the $10 billion to $20 billion range, according to catastrophe modelers and insurance industry market analysts.

Losses from Uri may be “somewhat comparable to those from Hurricane Harvey, which was a Category 4 hurricane that made landfall on Texas and Louisiana in August 2017,” according to S&P Global ratings. The market intelligence organization said in a Feb. 26 media release, however, that it was still “too early to accurately quantify the insured losses given the complexity of the event.”

Catastrophe modelling agency Karen Clark & Co. has estimated insured losses from the storm at around $18 billion. Hurricane Harvey caused about $19 billion in insured losses in Texas and $30 billion across the U.S., S&P Global noted.

AIR Worldwide said industry insured losses in Texas “appear likely to exceed $10 billion” and estimated “average claims severity values of $15,000 for residential risks and $30,000 for commercial risks.” The catastrophe risk modeling firm added, however, that the $10 billion figure could rise significantly due to a number of factors. Those factors could include “a higher than expected rate of claims among those risks affected by prolonged power outage, whether utility service interruption coverages pay out, larger than expected impacts from demand surge, government intervention, and whether claims from mold damage start to emerge as a significant source of loss.”

In an article published by Bloomberg, Chuck Watson, a disaster modeler for Enki Research, estimated that losses from the extended freeze and power outages in Texas could reach $90 billion, with around $20 billion of those losses covered by insurance.

Winter storm Uri left millions in Texas without power for days, and extreme low temperatures froze pipes, causing them to burst. Many locations experienced their longest-ever, continuous recorded freeze, according to AIR, “with Waco as an example of one Texas city staying below freezing for 203 consecutive hours — 53 more than the previous record. At the peak of the low temperatures, on February 15, the average temperature across Texas was just 12° Fahrenheit, or 6° lower than the average temperature in Alaska on the same day.”

In a report issued on Feb. 19, “Potential Record Catastrophe Losses for Texas Insurers Due to Winter Storm Uri,” AM Best said it expects the heaviest volumes of claims stemming from Uri to come from “the homeowners, commercial property, and auto lines of business.” The ratings agency also warned that a “significant” loss contributor will be the “surge in demand for contractors and construction materials.”

In addition to property damage outside residential structures from snow and ice, claims will arise from water damage and flooding in building interiors resulting from frozen and broken water pipes. “Depending on policy coverage terms, homeowners insurers may also be on the hook for hotel costs and additional living expenses for families that need shelter while their homes are uninhabitable due to cold temperatures,” AM Best said.

The same types of property damage experienced by residential structures will plague commercial property as well. Plus, commercial claims likely will arise from businesses that suffered losses due to the power outages, AM Best said. “Extended power outages could create losses not only for primary insurers but reinsurers as well,” AM Best added.

Additionally, due to the “heightened perils of traveling on slick, icy Texas streets, roads, and highways, personal auto insurers in Texas and other states will also likely face significant increases in claims from a spike in accidents,” the ratings agency noted.

The Texas Department of Insurance on Feb. 26 issued a data call to insurers for information on claims stemming from the severe winter storm that impacted the state Feb. 11 – 19. March 31 is the due date for the first report for data as of Feb. 28. Subsequent reports are due monthly, at the end of each month, TDI said.

Homeowners/Farmowners Multiperil Companies with Large Concentrations in Texas
Ranked by 2019 Texas Homeowners/Farmowners Multiperil DPW as a % of Total Company Homeowners/Farmowners DPW
(Minimum 50% Share of Company DPW Comprised of Texas Homeowners/Farmowners DPW)
($ thousands)
AMB # Company Name Texas US Texas % of US
001767 State Farm Lloyds 1,900,767 1,900,767 100.0
003312 Texas Farmers Insurance Company 855,383 855,383 100.0
010678 Allstate Texas Lloyd’s 325,343 325,343 100.0
004359 Texas Farm Bureau Underwriters 263,150 263,150 100.0
000892 Texas Farm Bureau Mutual Insurance Co 201,011 201,011 100.0
003566 Chubb Lloyds Insurance Company of Texas 177,746 177,746 100.0
001753 Foremost Lloyds of Texas 86,139 86,139 100.0
001743 Travelers Lloyds of Texas Insurance Co 85,095 85,095 100.0
011417 Metropolitan Lloyds Ins Co of Texas 76,479 76,479 100.0
012703 Texas FAIR Plan Association 53,217 53,217 100.0
012339 Auto Club Indemnity Company 142,033 142,056 100.0
012421 ASI Lloyds 227,903 243,342 93.7
013125 Homeowners of America Insurance Co 149,755 168,858 88.7
022605 Allied Trust Insurance Company 69,850 87,797 79.6
010681 State National Insurance Company, Inc. 65,851 90,595 72.7
003333 Meridian Security Insurance Company 118,670 169,992 69.8
003652 Allstate Fire and Casualty Insurance Co 118,054 193,154 61.1
022327 Clear Blue Insurance Company 87,876 147,163 59.7
012053 Safeco Insurance Company of Indiana 314,609 594,007 53.0
022321 Spinnaker Insurance Company 102,536 196,131 52.3
Source: AM Best data and research
Commercial Multiperil Property Insurers with Large Concentrations in Texas
Ranked by 2019 Texas CMP Property DPW as a % of Total Company CMP Property DPW
(Minumum 50% Share of Company DPW Comprised of Texas CMP Multiperil DPW)
($ thousands)
AMB # Company Name Texas US Texas % of US
001767 State Farm Lloyds 70,626 70,626 100.0
001734 The Hanover Casualty Company 29,003 29,003 100.0
002614 Hartford Lloyd’s Insurance Company 22,611 22,611 100.0
012570 Insurors Indemnity Lloyds 9,097 9,097 100.0
003297 Travelers Lloyds Insurance Company 8,926 8,926 100.0
012318 Utica Lloyd’s of Texas 8,375 8,375 100.0
003817 Hochheim Prairie Casualty Insurance Co 5,073 5,073 100.0
001709 American Modern Lloyds Insurance Company 4,010 4,010 100.0
001876 Union Standard Lloyds 1,442 1,442 100.0
001775 United Fire Lloyds 1,147 1,147 100.0
011021 Samsung F & M Insurance Co, Ltd USB 1,685 2,061 81.8
022328 Clear Blue Specialty Insurance Company 1,774 2,490 71.2
012472 ANPAC Louisiana Insurance Company 2,278 3,346 68.1
002422 Republic Underwriters Insurance Company 2,886 4,850 59.5
010611 Acceptance Indemnity Insurance Company 9,663 16,412 58.9
011783 American Property Insurance Company 1,250 2,146 58.2
Source: AM Best data and research
Auto Physical Damage Insurers Wholly Concentrated in Texas
100% of 2019 Auto Physical Damage DPW in Texas
(Minimum $10 Million in 2019 Texas Auto Physical Damage DPW)
($ thousands)
AMB # Company Name Texas
003690 Progressive County Mutual Insurance Co 1,541,401
022059 GEICO County Mutual Insurance Company 998,243
004097 Farmers Texas County Mutual Insurance Co 626,143
012569 Liberty County Mutual Insurance Company 483,004
004682 Consumers County Mutual Insurance Co 234,024
001758 Auto Club County Mutual Insurance Co 181,176
003634 Foremost County Mutual Insurance Company 171,212
000892 Texas Farm Bureau Mutual Insurance Co 170,212
000764 Allstate County Mutual Insurance Company 130,682
010311 Home State County Mutual Insurance Co 130,372
010346 Colonial County Mutual Insurance Company 118,096
012564 Germania Select Insurance Company 107,865
013850 Texas Farm Bureau Casualty Ins Co 105,477
003382 Southern County Mutual Insurance Company 101,923
010360 Old American County Mutual Fire Ins Co 96,101
004359 Texas Farm Bureau Underwriters 92,464
003572 Infinity County Mutual Insurance Co 74,194
002476 State Farm County Mutual Ins Co of Texas 55,056
002661 Redpoint County Mutual Insurance Company 52,124
004286 Mercury County Mutual Insurance Company 38,933
011417 Metropolitan Lloyds Ins Co of Texas 36,270
011055 Unitrin County Mutual Insurance Company 34,660
003817 Hochheim Prairie Casualty Insurance Co 31,959
022111 Alinsco Insurance Company 31,272
003277 Dairyland County Mutual Ins Co of Texas 28,614
010445 Hallmark County Mutual Insurance Company 25,235
012107 Farm Bureau County Mut Ins Co of Texas 24,936
010574 CEM Insurance Company 21,015
002779 Germania Fire & Casualty Company 20,148
010255 American National County Mutual Ins Co 14,288
Source: AM Best data and research

Topics Texas Profit Loss Windstorm

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