Frozenomics: How the extreme cold impacts businesses and could cause a rise in insurance premiums
That number is even higher than snowstorm on Feb. 13, which saw 64 disabled vehicles.
As a result of accidents like these and frozen pipes, insurance claims have been on the rise.
"In general claims are up across the board because of the weather," said John Wolff, CEO of Loudoun Insurance Group.
Increased claims may mean increased insurance premiums in the long term.
"There could be a trickle-down effect to increased premiums because of an elevation in claims,"said Wolff.
Anything that has a negative impact on long-term earnings and balance sheets could affect premiums going forward, Wolff said.
The chance of raising premiums could also depend largely on the exposure of the insurance company in areas hard hit by the storms.
For example, if an insurer has a large chunk of its customer base in the areas hit hardest by cold, they are more susceptible to high numbers of claims than a company based in Texas or Southern California.
More than $1.5 billion in losses on upwards of 177,000 claims were reported by companies from Jan. 1 to Feb. 21, according to a report from Business Wire. That makes it one of the top five costliest years for that time period since 1980.
Virtually every business has been affected by the polar vortex in late 2013 and early 2014. A reemergence of the polar vortex caused many Loudoun businesses to close all day Monday.
Shuttered businesses and frozen out customers means fewer cash registers ringing and a rough beginning to 2014 for others.
So who was hit hardest by the deep freeze? That is largely dependent on the company.
Dulles Town Center has seen robust foot traffic on some snow days, according to Dan Cook, director of marketing with Lerner Enterprises.
"Fortunately Dulles Town Center is an enclosed mall and shoppers are able to enjoy our collection of shops, dining choices and amenities without driving all over town," he said.
Macy's could have lost as much as $30 million nationwide, according to an article in Bloomberg Businessweek.
UGG Boots, on the other hand, enjoyed brisk business, reporting that quarterly net sales were up nearly 19 percent.
There have been a few contradictions within the same industry however.
Although General Motors put out a release attributing a 10 percent drop in sales to the colder weather, local GM dealer Dulles Motorcars has seen an increase in car sales from last December and January.
"Interesting enough, we did experience significant [year over year] growth in December and January in lieu of the snow storms that have nearly 'frozen' our operations," said Nadia Saghafi, the director of marketing and public relations at Dulles Motorcars.
More folks may be staying home and shopping for cars online. Web traffic to their site has grown by 50 percent compared to last January.
The real estate market was also hit hard by the harsh winter. Home sales in Loudoun County dropped by 13 percent and townhouse sales were town 26 percent over last January.
According to a market report from the Dulles Area Association of Realtors, "Northern Virginia was off to an unusually cold and icy start, likely affecting buyers throughout the area.”
Post a commentCommenting is not available in this channel entry.
Comments express only the views of the author and do not necessarily reflect the views of this website or any associated person or entity. Any user who believes a message is objectionable can contact us at [email protected].
Patchy rain nearby
|Hi 40°||Hi 53°|
|Lo 39°||Lo 49°|
|The Loudoun Times-Mirror
is an interactive, digital replica
of the printed newspaper.Open the e-edition now.