INDUSTRY IMPACTS
While the frequency of hail events has decreased from historical levels , the number of SEVERE hail events increased to its highest level since 2018 . A severe hail event is defined as hail of 2 inches or larger . The population density where these severe hail events occur will drive the impact on insured losses .
These severe hail events have a broad effect on the insurance industry because they impact multiple coverage lines , both auto and property risks , and are difficult to account for in carrier rate modeling .
Over the last three or four years , Kansas has been rather fortunate with a relatively low frequency of tornadoes compared with the data over the past 20 years . However , there has been an increase in severe weather events involving wind . Carriers have their eye on an increase in wind and hail damage caused by convective storms and thunderstorms .
Over the several years our lower frequency of tornadic activity has been replaced by damage from high winds . There has also been increase in frequency of wind events across the United States . Just like in Kansas , there has been an uptick in severe hail events from 2022 to 2023 .
The big issue facing the insurance industry is the claims costs associated with replacing damaged roofs . The inflationary pressures have hit the insurance industry hard , especially for roof replacements . On the personal lines side , asphalt shingles are not necessarily designed to resist large hail combined with the higher winds we ’ re experiencing .
In addition , The Insurance Institute for Business and Home Safety has researched the durability of shingles over time and while a manufacturer may say it has a 30-year life , it has a higher likelihood of vulnerability to damage from severe weather closer to year ten of its product life . This has driven insurance carriers in Kansas to make rate and valuation adjustments to policies .
CONTINUED ON PAGE 14
MAY / JUNE 2024
7