Loss Trends
Over the past 10 years, on average, family office clients experienced approximately five claims per year, and the average individual household in this population had one claim approximately every two years.
In the five-year view, the severity of industry-wide home-related losses was driven upward by 2017 claims. That year, homeowners incurred a record $144 billion in insured property losses from natural disasters, including Hurricanes Harvey, Irma, and Maria, as well as a record $14 billion from wildfires across California, and parts of Canada and Europe.16 Flooding from Hurricane Harvey alone damaged 200,000 homes and 500,000 vehicles, resulting in insured losses of $30 billion.
Claims trends over the past year have also been influenced by lifestyle changes due to the pandemic. Clients have been spending more time in their homes, specifically secondary residences. Anecdotally, we have noted an increase in construction claims, such as faulty workmanship, likely due to the fact that clients who are now home more often are noticing previously overlooked damage. Maintenance claims, such as bathroom leaks, also have become more common. Auto claim frequency has remained surprisingly high, even as many people remain at home during COVID-19. And wildfires have been a major loss driver in western states. In some cases, clients have received full policy payouts and invested the proceeds in new property elsewhere.
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