When it comes to accurately assessing risk for home insurance, not all perils are created equal. On top of that, different geographical areas may be impacted by different perils. The Wind peril, for example, includes hurricanes (primarily affecting the Southeast) and tornadoes (primarily affecting the Midwest).
The 2017 LexisNexis® Home Trends Report offers a refreshed view of by-peril trends in the U.S. home insurance industry with updated insights to help carriers make more informed business decisions. Complementary to the report is the 2017 LexisNexis Home Trends Review infographic, a visual summary that offers data, analysis and insight into current trends in the home insurance industry.
In addition to insights on loss cost, frequency and severity, the report and infographic include details on seasonality, distribution of catastrophe claims and geographic trends.
Highlights from the report and infographic include:
Wind: After five years of decline, the industry saw an increase in catastrophe Wind claims, more than a quarter of which were due to wind damage—the highest since 2013.
Fire: In addition to Fire, this peril includes Lightning, which experiences a different seasonality and behavior. Each also tends to affect different states, with the Southeast and Midwest having the highest frequency of Lightning-only losses.
Hail: A significant contributor to All Peril losses, in 2016 Hail made up about 20% of all losses, a 44% increase over 2015 loss costs. Of note, from 2011–2015, the non-catastrophe and catastrophe composition of Hail claims remained stable at an average of 58 percent.
Non-Weather Related Water: After a long period of elevated catastrophe claims, there was a substantial drop in claims in 2016. Severe winters typically can result in high loss costs. During the latter part of the period covered in the report and infographic, a milder winter brought warmer weather, resulting in fewer loss costs.
Weather Related Water: This peril is strongly influenced by frozen pipe claims. However, during the period of time covered in the report, mild winters resulted in a considerable drop in frequency and loss costs.
The 2017 LexisNexis Home Trends Report and infographic highlight some of the challenges that home insurance carriers face in managing by-peril risk in their businesses. The insights into peril-related trends can help you assess and price risks more accurately and ultimately, achieve a more profitable book of business.