Property claims severity is running above historical norms -- and the contributing factors are structural, not transient.
Construction labor costs, building material prices, and the increasing complexity of modern homes and commercial properties are all contributing to higher repair and replacement costs. Carriers that built pricing and reserving assumptions on pre-2022 cost data are continuing to see unfavorable development.
Preferred vendor network management is one of the highest-leverage severity controls available. Carriers that have invested in strong contractor relationships, quality auditing, and scope review processes are consistently achieving better outcomes than those relying on open market repairs.
Subrogation recovery deserves renewed attention as well. In an environment of elevated severity, rigorous pursuit of subrogation opportunities -- including against product manufacturers, contractors, and utilities -- is a meaningful contribution to net loss cost management.
#PropertyClaims #ClaimsManagement #PAndC #SubrogationRecovery #InsuranceSeverity
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