ATLANTA — 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:
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.