Insurers know where damaging hail is likely to fall.
Hail claims account for $6.2 billion per year in insurance losses.1 To help mitigate these losses, insurers typically make underwriting decisions based on where damaging hail is likely to fall.
But where hail falls—and where hail claims are most likely—are two different things.
Case in point: Nebraska, Kansas, and South Dakota are states with the most severe hail days annually.2 However, it is Texas—a much larger, more populated state—that has the most hail claims. And there is an added layer of complexity: within hail hazard zones there is significant variation in structure vulnerability and claims patterns.
As a result, hail claims frequency and losses vary enormously within the same hail hazard zone—
and even within the same ZIP Code.
Given these challenges, how can insurers better predict hail claims frequency and improve underwriting results?