Verisk: Claims Volume Rose 36% in 2024, Largely on Catastrophe Claims
Property claims volume rose 36% in 2024, driven by a massive rise in catastrophe claims thanks in part to a severe Atlantic hurricane season, a new report shows.
Verisk issued its Q4 Property Report on Thursday, which shows the rise in property claims was driven by a 113% increase in catastrophe claims.
Claims patterns showed a shift from traditional winter storm impacts to late-season hurricane activity, which impacted the Southeast, where costs increased at six times the national rate, according to the report.
Related: Florida Wants More Claims Data, Warns Insurers About Concurrent Causation Denials
The report shows hurricane-related claims made up 9% of total claims volume, amounting to a 1,100% increase from Q4 2023. Both flood and wind claims saw 200% increases in volume, reflecting the quarter’s severe weather patterns, the report shows.
“The fourth quarter of 2024 highlighted the evolving nature of catastrophic risks facing our industry,” the report states. “While Q4 traditionally brings winter storm challenges, this quarter saw a dramatic shift in loss patterns, with late-season hurricane activity creating increased demands on claims operations.”
Regionally, claims volume was driven by a variety of perils. Texas again saw high claim volumes driven by a mix of wind, water, and hail events, while California experienced a high volume of flooding claims in the Bay Area.
“While hurricane activity explains increased claims in Florida, Georgia, and South Carolina, we also observed unexpected surges in the Great Plains and Pacific Northwest, primarily from water, hail, and wind events,” the report states. “Conversely, the Northeast experienced a marked decrease in wind-related claims compared with 2023.”
Related: Report Drills Down on Property Damage from Beryl, Helen and Milton
Figures show a 7% decrease in average severity based on initial Q4 data compared with 2023, but that figure may rise. In Q3 2024, initial severity figures changed as the average replacement cost value (RCV) rose from $15,300 to $16,800 as complex claims reached completion. Third quarter claims completed in Q4 averaged $27,600, after the impact of larger, more complex claims came to bear, according to the report.
“Based on these maturation patterns, we project Q4’s average RCV could reach approximately ($18,600) as claims develop, aligning more closely with historical trends,” the report states.
Reconstruction costs continued on an upward trend. Commercial properties saw growth at 5.5% year-over-year compared with residential’s 4.5% growth.
Related: US Economic Losses From Natural Disasters Soared in 2024
Labor costs accelerated faster than material costs. U.S. material costs rose 2.63% and Canadian costs increased 2.47% year-over-year. U.S. labor costs rose 1.42% (down from Q3’s 1.64%), while Canada maintained a steady 1.39% increase.
Hurricane Milton had a marked impact on claim patterns across the Southeast, generating nearly 187,000 claims totaling $2.68 billion in RCV, with 8% still outstanding as of the release of the Verisk report.