ATLANTA, Oct. 20, 2020 /PRNewswire/ -- LexisNexis®
Risk Solutions released its fifth annual LexisNexis Home Trends
Report, announcing that U.S home insurance catastrophe claims and
loss cost both decreased in 2019. Catastrophe claims dropped by 32%
year-over-year and all-peril loss cost decreased by 13%. While 2019
brought severe wildfires, hurricanes, hailstorms and flooding to
some states, the severity and frequency across all perils were
lower, which was a welcome relief following significantly higher
levels for the previous two years.
Given the unpredictable nature of extreme weather events,
insurance carriers need access to trended by-peril home insurance
data in order to fully understand the risks associated with a
particular location and make informed risk assessment and
underwriting decisions. The 2020 LexisNexis Home Trends Report is
designed to provide insights that can help home insurance carriers
meet loss-ratio objectives and growth targets as well as support
more precise and profitable pricing.
Looking at overall trends for 2019, 90% of catastrophe losses in
2019 resulted from hail and wind perils. Texas, at 22%, had the highest distribution of
catastrophe claims with 872 major hail events. For the second year
in a row, Colorado ranked the
highest in loss cost for 2019, and Colorado and Nebraska tied for the highest in loss cost
over the six-year period from 2014-2019.
"For those of us in the home insurance industry, 2019 was a
welcome relief," said George
Hosfield, senior director and general manager, Home
Insurance, LexisNexis Risk Solutions. "Unfortunately, 2020 looks
less promising due to wildfire and hurricane activities, as well as
COVID-19 creating new claims patterns due to higher home occupancy.
All signs point to next year's report being significantly less
positive, making it more important than ever that home insurance
carriers have by-peril and macro-level trended data that they can
use to benchmark their performance and help make better informed
underwriting and risk assessment decisions."
Additional key findings, by peril, from the LexisNexis Home
Trends Report include:
- Wind – 2019 saw a decrease in wind loss cost (20%),
frequency (10%) and severity (7%) from 2018. Loss cost and severity
peaked in September, mainly driven by Hurricane Dorian and
Hurricane Humberto. Overall there was a lower proportion of
catastrophe claims than the previous two years, which can be
attributed to fewer powerful storms having made landfall.
- Hail – Hail loss cost increased by 19%, making it one of
the few perils that increased from 2018, likely due to 2019
experiencing 782 more major hail events than the previous year.
Texas remained steady, accounting
for nearly 30% of all hail claims in both 2018 and 2019 and the
severity of Texas hail claims
increased by 5%. April, May and June accounted for nearly 58% of
hail claims in 2019.
- Fire and Lightning – California accounted for 96% of catastrophic
fire claims in 2019. Total catastrophe loss cost for fire and
lightning claims dropped to 5% of 2018's loss cost. While promising
for 2019, significant catastrophe claims are expected for 2020
given that by August 2020, the
cumulative acres burnt by wildfires had already surpassed that of
the entire 2018 season.
- Weather-Related Water – Despite the country experiencing
the second wettest year on record, weather-related water loss cost
decreased by 3% from 2018. January and February made up 28% of the
loss cost for 2019. While frequency and loss cost decreased,
severity increased by 8%, likely driven by record flooding along
the Missouri and Mississippi
Rivers.
To download the 2020 LexisNexis Home Trends Report, click
here.
About LexisNexis Risk Solutions
LexisNexis Risk
Solutions harnesses the power of data and advanced analytics to
provide insights that help businesses and governmental entities
reduce risk and improve decisions to benefit people around the
globe. We provide data and technology solutions for a wide range of
industries including insurance, financial services, healthcare and
government. Headquartered in metro Atlanta, Georgia, we have offices throughout
the world and are part of RELX (LSE: REL/NYSE: RELX), a global
provider of information and analytics for professional and business
customers across industries. For more information, please
visit www.risk.lexisnexis.com and www.relx.com.
Media Contacts:
Rocio Rivera
LexisNexis Risk Solutions
Phone: +1.678.694.2338
rocio.rivera@lexisnexisrisk.com
Mollie Holman
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
mholman@brodeur.com
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SOURCE LexisNexis Risk Solutions