Claims statistics are the yearbook of a building's insurance life: a dry row of numbers that tells a story – about how the building is ageing, where its systems are weak, and how well prevention works. At the renewal it is this row of numbers that goes on the scales: the insurer prices the coming year from it, and the building, if it reads the numbers intelligently, learns from them where to intervene. This article is a guide to reading your claims statistics.
- Claims statistics are the number, type and amount of losses over time – a forecast of risk for the insurer, a diagnosis for the building.
- At the renewal the statistics can move the premium, the deductible and the terms of cover alike – in either direction.
- The right reading at renewal asks not “were there a lot of claims?” but: is there a pattern, and what did the building do about it?
What does the row of numbers show?
Three dimensions are worth looking at. Frequency: how many claims there were each year – the odd claim is normal operation, a cluster is a warning. The mix of types: what there is a lot of – recurring water damage speaks about the risers, repeated glass claims about the amount of traffic, criminal damage about the surroundings. And the severity picture: many small claims, or rare large ones? The two patterns call for different treatment – many small ones are the territory of tuning the deductible and of prevention, rare large ones that of the quality of the cover.
How does it affect the renewal?
At the renewal the insurer works with the building's current claims statistics: a deteriorating record can bring a premium increase, stricter terms or a higher deductible; an improving picture is a bargaining position – whether with the current insurer or when going back to the market, because the market prices improvement. The time horizon matters too: insurers typically look at several years of statistics, so one bad year is not a verdict – and one good year is not an instant triumph either. It is the trend that counts.
The manager's reading at renewal
In the renewal routine the claims statistics get three questions. Is there a pattern? – if there is, the prevention plan is updated: the relevant point of the checklist becomes this year's priority. Is the deductible-and-premium structure still right? – with many small claims below the deductible, tuning that structure may well be sensible. And: are the statistics reflected in the premium? – if the building has been claim-free for years but the premium does not show it, that is an argument for going back to the market. The statistics are also a tool for communicating with residents: the claims block of the annual report is filled from here.
Where does the building get its statistics from?
From two sources: from the insurer (a claims history statement, a compulsory attachment to any quote request) and from the building's own archive – the latter is the richer one, because it also contains the losses that were never reported and were put right out of the building's own pocket. Together they give the complete picture, and it is the complete picture that good decisions come from: on the role of claims history there is a separate article.
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