Unfurling The Personal Umbrella Loss Database
Personal Umbrella insurance is increasingly seen as an effective way for personal lines writers to grow their book – by retaining customers and attracting good business. But the risks umbrella covers also present a large exposure, so understanding and analyzing large losses can help insurers make better decisions in underwriting and marketing their umbrella product.
Our latest Personal Umbrella Cause of Loss Study examines all personal umbrella claims reported to us by clients during a five-year period. It helps us to detect trends, determine frequent severity drivers, and identify new or unusual loss causes that might not be on an insurer’s radar screen.
Auto claims continue to dominate Personal Umbrella (PU) experience, in both loss frequency and severity. This is consistent with prior studies: youthful drivers were the leading identifiable cause of loss, followed by driving while impaired (DUI/DWI) claims. But demographics are shifting and senior drivers are growing their share of loss dollars in PU according to our studies, with 13% of umbrella auto losses coming from older drivers: more than double from our last study period.
Personal injury (PI) claims may be more affected by legal and societal trends than any other PU exposure. We found most PI claims continue to come from the “traditional” type of loss we’ve historically seen in our book – property disputes, trespass, slanderous or defaming statements, and wrongful eviction.
Our sense is insurers have not yet seen the full effect of surging electronic PI claims as the number of claims in our study was lower than we expected.That said, when we just looked at first-dollar drop down PI umbrella claims, we found the average “social media”-related loss was more than double that of the average “traditional” PI loss. So we will continue to watch “social media” and its potential impact on homeowner liability.
We have findings above and beyond those mentioned here, many of which could only be revealed by a large and diverse loss database. We’d be pleased to discuss them with you in the context of your own Personal Umbrella book of business.