First Party Insurance Fact Sheet | Home Insurance

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First Party Insurance Fact Sheet Texas Legislature 2017
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    Leg. Adv. Paid for by Texas Trial Lawyers Association, John L. (Lin) McCraw, III, President. 1220 Colorado Street, Suite 500, Austin, TX 78701 Texas Property Insurance Market Incredibly Robust Property Insurance Profits High, Litigation Rates Low    Data collected by the Texas Department of Insurance shows the Texas insurance market is highly profitable, extremely robust, and incredibly competitive.  Texas home insurance carriers posted $4.5 billion in underwriting profit between 2012 and 2015. This equals a 13.6% profit, significantly higher than the 16-year average. The TDI data show that, despite a series of catastrophically severe hail storms between 2012 and 2015, insurer hail losses per $1 of premium increased a mere 2 cents over the sixteen year average. TDI’s findings show that the average litigation rate on disputed insurance claims since 2012 has dropped from 2.7% to just 0.7% of claims. The insurance industry considers 2% a typical litigation rate. Following high loss weather events, there are higher than usual claims filed. The TDI data indicates that insurers are paying fewer claims, resulting in more disputed claims. Sources: TDI Residential Property Hail Litigation Data Call Overview; TDI Quarterly Legislative Reports; Insurance Journal, 2/9/15    Home Insurance Underwriting Profit +13.6%   (2012-2015)   From 2012 to 2015, home insurance companies posted higher profits than the longer term 16-year average. Since 2012, litigation rates on home insurance claims average 1.7%, below what the insurance industry considers typical. 2.70%1.50%2.00%0.70% 0.0%0.5%1.0%1.5%2.0%2.5%3.0%2012 2013 2014 2015 Home Insurance Litigation Rate    Leg. Adv. Paid for by Texas Trial Lawyers Association, John L. (Lin) McCraw, III, President. 1220 Colorado Street, Suite 500, Austin, TX 78701 Texas Property Insurance Market Incredibly Robust Home Insurance Market Increasingly Competitive   Using the Herfindahl-Hirshman Index (HHI), TDI concludes that the Texas “homeowner’s insurance market has become less concentrated and increasingly competitive over the last 16 years, with its HHI value decreasing from 1,600 in 2000 to 1,038 in 2015. This downward trend has continued in the last four years.”   Sources: TDI Residential Property Hail Litigation Data Call Overview   
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