Aon’s latest insurance analysis suggests that roof actual cash value (ACV) endorsements could lower average claims from severe convective storms by about 30%, offering homeowners insurers another way to manage mounting hail and wind losses. The findings come as severe convective storms have become a major source of insured catastrophe losses across the United States.
The study examined claims from seven regional insurers covering 77 major severe convective storm events over five years. Aon compared otherwise similar homeowners policies with and without roof ACV provisions to assess how the coverage structure affected losses.
A separate review of 29 public rate filings in states exposed to severe convective storms found that homeowners could receive premium reductions of up to roughly 38% when roofs near the end of their useful life were subject to ACV treatment. Under such arrangements, policyholders accept a larger share of roof-loss costs in exchange for lower premiums.
“Insurers are on the front line of severe convective storm volatility, where hail and wind losses can quickly pressure their profitability and constrain growth,” said Steve Hofmann, CEO Americas, Reinsurance Solutions, Aon.
Aon said insured SCS losses reached $164 billion from 2023 through 2025, making those three years the costliest on record for the peril. The firm also identified a modeling issue: many catastrophe models assume replacement-cost roof coverage and do not account for ACV endorsements, potentially overstating modeled losses.
Aon said better information on roof age, covering and condition could help insurers improve underwriting, pricing, claims management and portfolio decisions.
The image is an illustration created with AI for general context.
Source: AON
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