Once again this year, LexisNexis® Risk Solutions is pleased to publish the LexisNexis® Home Trends Report. This report is intended to provide carriers an updated view of by-peril loss trends in the U.S. home insurance industry, with a focus on 2019 data. Covering both weather related and non- weather related perils, the report includes insights on loss cost, frequency and severity, and details about seasonality, distribution of catastrophe claims and geographic trends.
All told, 2019 trended in a positive direction for much of the insurance industry. In 2019, all-peril loss cost decreased by 13%, while severity decreased by 6% over the previous year. In terms of weather-related perils, catastrophe claims and loss cost were down in 2019, with fewer costs associated with wind, fire and lightning perils. This is likely due in part to the fact that many hurricanes in 2019 did not make landfall in the U.S. Of course, with good news often comes not-so-good news. In 2019, hail loss cost grew by 19% over 2018 numbers, particularly in Colorado. Severity also saw an increase.
Although severe wildfires, hurricanes, hailstorms and flooding did devastate areas of some states, severity and frequency were lower across all perils than in 2017 and 2018. Below are some key weather related findings for 2019:
- Fire and lightning – In a reverse from previous years’ upward trend, 2019 saw fewer and smaller fires resulting in lower severity and a decrease in loss costs.
- Wind – loss cost remained high compared to the six-year average, though severity and frequency decreased.
- Hail – The increase in loss cost was primarily driven by a surge in the frequency of claims thanks to the 5,392 major hail events in the U.S. in 2019.
- Water (weather-related) – January and February continue to be the worst months for this peril, totaling 28% of the loss cost for 2019.
The 2020 LexisNexis Home Trends Report highlights some of the challenges that insurance carriers face when managing by-peril risk in their businesses. By providing trends gathered from an industry-wide dataset, our goal with the report is to help insurers assess and price risks more accurately and ultimately, achieve a more profitable book of business.
Click here to download the 2020 LexisNexis® Home Trends Report.