"Early Adopter" States Approve LexisNexis® Rooftop Analytics Home Insurance Rating

Rhea-AI Summary

LexisNexis Risk Solutions announced the approval of its Rooftop analytics tool for home insurance carriers in multiple states, including Alabama, Georgia, Louisiana, and South Dakota. This model aims to accurately price roof risk by assessing aerial imagery and historical claims data. The average home insurance loss ratio has now surpassed 89%, with the approved states accounting for nearly 19.2% of national hail losses. The Rooftop model boasts a potential 20x lift in loss cost relativity, assisting insurers in better managing their expense ratios and enhancing risk assessment.

Positive

• Rooftop tool approved in key states with high wind and hail loss costs, aiding home insurers.
• Expected 20x lift in loss cost relativity and 18x in claims rate relativity enhances pricing accuracy.
• Provides up to 80 actionable attributes to improve decision-making for insurers.

Negative

• Home insurance loss ratios exceed 89%, indicating increasing risk in the market.
• Continued rising severity and frequency of catastrophic losses challenge pricing strategies for insurers.

LexisNexis Rooftop solution helps home insurance carriers price for roof risk more accurately by helping improve loss cost and claims rate relativity

ATLANTA, May 3, 2022  /PRNewswire/ -- LexisNexis® Risk Solutions, a leading provider of data and analytics for the insurance industry, today announced that LexisNexis® Rooftop, a risk assessment tool for home insurance carriers, has been approved for rating in a number of states in which wind and hail loss costs have traditionally been high. Alabama, Georgia, Louisiana and South Dakota have recently been added to the growing list of states that have approved the model. LexisNexis Rooftop has been approved in each of the states where the model has been filed.

LexisNexis Rooftop provides a predictive model to help home insurance carriers segment properties based on roof risk. The score is created by combining aerial imagery insights with weather-related total loss experience, from auto and home insurance claims insights, that assess pre-existing damage and the likelihood of a future wind or hail claim. LexisNexis Rooftop's aerial imagery insights come from Arturo, an artificial intelligence analytics provider of property insights and predictive analytics.   

Home insurance loss ratios have been increasing, with the average loss ratio now more than 89%, according to the latest report from S&P Global Market Intelligence, and the six states that have approved LexisNexis Rooftop represent close to one-fifth (19.2%) of all hail losses nationwide. According to the 2021 LexisNexis Home Trends Report, Alabama, Georgia and Louisiana are three of the states with the highest loss cost wind claims between 2015 and 2020, and South Dakota has some of the highest loss costs for hail over that same six-year period.

"Roofs that are in poor condition are more loss prone in both catastrophic and non-catastrophic situations," said Erin Oswalt, director of home insurance at LexisNexis Risk Solutions. As the market continues to see rising levels of severity, frequency, and types of catastrophic losses, home insurers are grappling with how to get ahead of major weather events."

To help combat this, many home insurance carriers are evaluating their rating plans to determine how they can better manage their expense ratios. The LexisNexis Rooftop model shows up to a 20x lift in loss cost relativity and an 18x lift in claims rate relativity between the highest-risk properties and lowest-risk properties. Together with the accompanying data attributes, LexisNexis Rooftop can act as a tool for home insurers for faster, more cost-effective decision-making. 

"As roof loss ratios continue to rise, home insurance carriers are consistently looking for ways to better segment properties as it relates to roof risk," said Oswalt. "With LexisNexis Rooftop now approved in six states, several of which have some of the highest loss cost wind and hail claims in the country, and additional state regulatory filings underway, home insurers serving these states can better manage their expense ratios and price policies more accurately."   

To help insurers better assess risk, LexisNexis Rooftop:

• Provides a predictive risk score from 1-100 that indicates the likelihood of a large weather claim within the next 12 months.
• Returns a score even if a recent aerial image is not available.
• Delivers up to 80 actionable attributes including recent weather events and related claims insights and dozens of imagery insights from Arturo.
• Is available system-to-system in an automated process through a single point of access where LexisNexis Risk Solutions delivers industry leading data analytics solutions such as C.L.U.E.® Property, LexisNexis® Current Carrier Property, LexisNexis® Property Data Prefill and others.

LexisNexis Rooftop will continue to be filed in additional states, and LexisNexis Risk Solutions has a filing support team available to support direct filings from carriers.

For more information about LexisNexis Rooftop, click here.

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-based analytics and decision tools for professional and business customers. For more information, please visit www.risk.lexisnexis.com and www.relx.com.

Contacts:
Chas Strong 
Director, Communications
LexisNexis Risk Solutions
706.714.7083
charles.strong@lexisnexisrisk.com

Donna Armstrong
Brodeur Partners for LexisNexis Risk Solutions
darmstrong@brodeur.com

 

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SOURCE LexisNexis Risk Solutions

FAQ

What is the LexisNexis Rooftop tool approved for?

The Rooftop tool is approved to help home insurance carriers accurately price roof risk by assessing potential loss costs due to wind and hail.

Which states have approved the LexisNexis Rooftop analytics tool?

The tool has been approved in Alabama, Georgia, Louisiana, and South Dakota.

How does the LexisNexis Rooftop tool benefit insurers?

It provides a predictive risk score and significant improvements in loss cost and claims rate relativity, helping insurers manage expense ratios better.

What is the expected lift in loss cost relativity from the Rooftop model?

The Rooftop model shows up to a 20x lift in loss cost relativity.

Why are home insurance loss ratios increasing?

Home insurance loss ratios are increasing due to rising severity and frequency of catastrophic weather events.