LexisNexis Risk Solutions

October 26, 2017

By Laura Frisbie, Statistical Modeler and George Hosfield, Senior Director, Home Vertical

Hurricane Matthew. The Great Smoky Mountain wildfires. Softball-sized hail in Texas. Catastrophes like these emphasize the pressures that property insurance carriers face in trying to set precise rates while also growing the businesses. To help insurers achieve these concurrent goals, each year LexisNexis examines historic, seasonal and geographical by-peril trends due to wind, hail, fire, water–non-weather, water–weather, theft, liability and other perils.

Here are a few findings from the Home Trends Report–2017 that we wanted to highlight.

Catastrophe losses put Texas and Colorado on top

Catastrophe losses increased in 2016, jumping 5 percentage points from 2015 levels. These were mostly driven by Wind losses, as we will discuss below, and Hail losses (primarily in Texas, where softball-sized hail pummeled the San Antonio region). Combined, Texas and Colorado accounted for 48 percent of catastrophe losses in 2016.

Jump in Wind losses in 2016

In 2016, more than 25 percent of overall claims were due to wind damage (the highest since 2013) and nearly half of Wind claims were due to catastrophic events. Notably, Wind losses vary with geography and season. In spring 2016, tornadoes struck the Midwest—which, since 2011, has had the top all-peril loss costs in aggregate, due to both tornadoes and thunderstorms. Then, in fall, Hurricane Matthew left a wake of damage in Florida, Georgia and the Carolinas.

Wind peril impact by geography

Fire and Lightning drive different behaviors

Collected under the overall category of Fire, Fire and Lightning perils show different behaviors. For example, Fire drives severity while Lightning dictates frequency. Lightning from summer thunderstorms primarily affect the Southeast and Midwest—Georgia, Alabama and Arkansas posted the highest frequency of Lightning-only losses. However, wildfires can be very costly, such as the 2016 Great Smoky Mountain wildfires in Tennessee (current estimates peg it at $940 million in losses).

Fire seasonality month to month

Not all perils are created equal

These are just a few examples of the deeper insights that property insurance carriers can derive by having access to more granular details on home insurance trends. The LexisNexis Home Trends Report–2017 can help you:

  • Benchmark performance against the rest of the industry
  • Achieve more accurate, precise pricing to improve profitability
  • Better assess and select by-peril risk at the geoblock level
  • Identify untapped opportunities for business growth

Boost your organization’s underwriting capabilities today. Access the 2017 LexisNexis Home Trends Report.