ZestyAI, a provider of climate and property risk analytics solutions, and the Insurance Institute for Business & Home Safety (IBHS) released new research examining catastrophic losses from severe convective storms, particularly hail.
ZestyAI offers insurance and real estate companies access to precise intelligence about every property in North America.
The study released focuses on hail-driven losses in property and casualty insurance.
According to ZestAI, hail losses are a persistent problem for property insurers’ risk management efforts. Historically, carriers have focused on intense events to predict hail risk, with supporting data confined to storms with hailstones larger than one or two inches. The study: Small Hail, Big Problems, New Approach, showed that high concentrations of small hail are more important than previously thought, pointing to an opportunity to broaden data sets to account for the cumulative effect all hailstorms have on a roof’s susceptibility to damage over time, leading to a claim.
This new research shows all hail needs to be accounted for when modeling and ultimately understanding losses.
ZestyAI said that by using data from all hail events, not just those with hail that meet the severe criteria of one inch or greater, will allow carriers to consider valuable data on smaller hailstone impacts.
Additionally, insurers can integrate climate and materials science to better understand hail frequency and severity. Research suggests using this new approach could perform as much as 58 times more accurately than looking at events with large and very large maximum hail sizes alone, hence allowing carriers to more effectively assess hail risk, achieve more profitable underwriting and open up ratings to previously avoided areas.
Attila Toth, founder and CEO of ZestyAI, said, “Hail losses are a persistent problem for property insurers’ risk management efforts. Three of the nation’s five largest publicly-traded P&C carriers mentioned hail as a key concern in 2022 financial reports. Greater losses have brought attention to hail risk, and the insurance industry needs better approaches to solve this problem.”
Earlier this year, ZestyAI partnered with CSAA Insurance Group for wildfire risk assessment.
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