Annual US Residence Traits Report Unveils Catastrophic Climate Occasions That Continues to Shedding Residence Insurance – Yahoo Finance
The LexisNexis Home Trends Report 2021 provides insights into home insurance claims and weather trends by severity, frequency and location to help insurers better predict risk
ATLANTA, Oct 26, 2021 / PRNewswire / – LexisNexis® Risk Solutions has published its sixth annual LexisNexis Home Trends Report, which shows that increasing extreme weather events are leading to higher weather-related claims costs for US homeowners and insurers. The LexisNexis Home Trends Report 2021 provides the home insurance trending data and location-based insights insurance carriers may need to make informed risk assessments and underwriting decisions.
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LexisNexis Risk Solutions' annual Home Trends Report found that catastrophic weather caused the highest damage in 6 years.
Catastrophic weather events such as forest fires, cyclones and floods were among the largest loss drivers for the home insurance industry, causing 39% of the losses in 2020 – the highest percentage in the last six years. Claims costs in 2020 also rose 6% year-on-year across all hazards after the upward trend of the last six years, which is expected to continue until 2021, making it increasingly difficult for airlines to make their pricing policies profitable.
"With catastrophic claims driving up losses and reinsurance costs, it is imperative that insurers have the latest hazard-related trend data and an analytics partner who understands how post-hazard trends change over time," said George Hosfield, Senior Director of Home Insurance at LexisNexis Risk Solutions. "Building underwriting and pricing decisions on accurate, up-to-date data helps insurers meet loss ratio and growth targets, as well as a better customer experience for consumers by helping homeowners avoid rising costs."
The cost and frequency of losses for all domestic hazards combined increased in 2020, with some states more affected than others. Louisiana had the highest cost of damage in the country in 2020 due to wind damage from a noxious hurricane season and 2021 has already brought a number of catastrophic weather events such as Hurricane Ida. Additionally, Colorado and Nebraska Due to the location in "Hail Alley" and the 7-9 days of hail per year in the period from 2015 to 2020, the highest damage costs.
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The Home Trends Report also analyzed the impact of COVID-19 on the US home insurance market. As more people work from home, the cost of loss from theft decreased significantly in 2020. The report notes that this may be due to the increased adoption of smart home security devices. In 2020, the risk of liability declined 48% year over year, likely due to COVID-19 restrictions and social distancing measures that resulted in court closings, restricted access to legal representation and increased household isolation.
Other key findings from the LexisNexis Home Trends Report include by hazard:
Wind: Wind frequency, damage costs and severity all increased significantly in 2020 – the frequency increased by 42% this year and the damage costs by 63%. 2020 marked the largest wind loss costs in the last six years.
Hail: The cost of damage and the severity of hail damage decreased in 2020, while the frequency remained constant. However, catastrophe claims accounted for 62% of all hail damage that year, and the incidence of hail catastrophe claims increased significantly by 9.9% year over year.
Fire and lightning: The 2020 forest fire season, the most active on record, resulted in an increase in claims costs and severity for insurers beyond 2017 and 2018. The proportion of catastrophe losses also increased. California With 37.2% of all catastrophe claims in 2020 nationwide, most claims costs, severity and frequency of fire and lightning damage were accounted for.
Non-Weather-Related Water: While the six-year trend in non-weather water damage continued to grow, 2020 saw a decrease in damage costs compared to 2019 – likely due to more time spent at home and possibly increased use of smart water leak detectors.
"This year has been very active in terms of hurricanes and other major storms," said Hosfield. “We anticipate this trend will continue in 2021 and the years ahead, which means it will become even more important for insurers to adopt new data to better assess roof risk in both new business and their renewal book. Insurers need to be armed with the best. "Roof condition information available to optimize coverage decisions."
To download the LexisNexis Home Trends Report 2021, click here.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions leverages the power of data and advanced analytics to deliver insights that help businesses and government agencies reduce risk and improve decision-making to help people around the world. We provide data and technology solutions for a variety of industries including insurance, financial services, healthcare, and government. Headquartered in Metro Atlanta, Georgia, we have offices around the world and are part of RELX (LSE: REL / NYSE: RELX), a global provider of information and analytics to professional and business clients. Further information is available at www.risk.lexisnexis.com and www.relx.com.
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