Call: 203-637-6655  or email – Kyle Shepard

severe weather

Aggregation!

The New Critical Reference for Home Insurance

It is clear that insurers are struggling to deal with the intensity of weather driven storms. Whether wind, tornadoes, wildfires or even intense rains storms, predictability is a challenge, even with Artificial Intelligence.

Future claim exposure for insurers is now under the aggregation microscope. Understanding the impact of geographic aggregation is crucial for selecting the right home insurance policy.

“the surge of aggregation has caused a flight away from regional insurers”

What is Aggregation, and what does it mean for Homeowners?

In the simplest terms, aggregation is tabulating the amount of exposure an insurance company has in a specific geographic region. With that basic math, an insurance carrier can decide if they are exposed beyond their capacity and reinsurance limits.

In the past, insurance companies would identify regions where they determined they could be successful and establish attractive rates to capture business in the region.

This new aggregation methodology is a reverse exercise in examining regions with a focus on weather, in relation to the amount of risk to a catastrophic event. As a result, if an insurer is deemed over-exposed non-renewals in home insurance are becoming the norm. At a minimum, the result is more significant rate increases.

Shrinking exposure in coastal areas like Florida is easy to understand, but even the Hamptons are becoming victims of aggregation.

The surge of aggregation has caused a flight away from regional insurers into larger insurance companies that have the necessary spread of risk across the USA to add protection against an aggregation non-renewal.

If you are concerned about your home being a victim of your insurer’s aggregation efforts, drop Kyle an email for a discussion kshepard@shepardinsgrp.com or call 203.698.9342.


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