US property claims severity and costs rising, even with stable designated cat events: Verisk

Property insurance claims severity and costs are rising in the United States, even during periods where the number of catastrophe events designated were stable. Verisk’s latest data shows the second-quarter of 2026 could become one of the most costly for insurers on an average property claims cost basis.

The major global catastrophe loss environment may have been relatively benign for reinsurance and insurance-linked securities capital providers this year so far, but US property insurance claims trends suggest that when major events do occur the costs and therefore industry losses could ramp up more quickly than before.

In its latest quarterly property report, Verisk explains that, “Property and reconstruction spend is consolidating into fewer, higher cost claims.”

While claim assignment volumes fell in the second-quarter, a period that typically sees meaningful severe weather activity across the United States, Verisk notes that “average severity is tracking toward the highest quarterly level in recent years.”

This means fewer claims to manage, but higher costs associated with each one, on average.

In fact, US claims assignment volumes in Q2 2026 fell to one of the lowest levels in recent years for the period.

Verisk explained, “Volume dropped 12.21% from Q2 2025 and ran 13.05% below the five-year average, extending a four-year decline. This decline concentrated in non-catastrophe claims: measured against the five-year average, non-CAT assignments were down 18.65% while CAT assignments slipped just 4.29%. The result is a quarter increasingly defined by catastrophe. CAT claims now account for 43% of Q2 volume, up from 34% five years ago, even though the number of PCS® designated events has held steady.”

At the same time, claim severity in US property insurance is following a typical maturity trend, which suggests the average claim cost for Q2 2026 may be one of the highest seen, despite the perceived reduction in cat losses that are much discussed across insurance, reinsurance and ILS markets.

Verisk stated, ” U.S. average severity currently sits at $17,085, down 10.77% from Q2 2025 but only 2.88% below the five-year average. Q1 2026 offers the precedent: initially reported at $16,079, it has since matured 13.1% to $18,185, exceeding the projection published last quarter. Applying a maturation rate drawn from several years of historical data, puts Q2 2026 near $18,794. Applying the stronger rate Q1 followed would put it above $19,400, which would make it the highest quarterly average in recent years. Both figures are projections and will move as data matures.”

At the same time as per-claim cost averages seem to be rising, with more of the claims falling into the catastrophe bucket, inflation continues to drive claims costs higher as well.

Combined labour and material costs are up 4% for the US year-on-year, while these costs accelerated each month of the second-quarter.

“For carriers, that means lower claim counts, a CAT heavier mix, and increasing severities are colliding with rising unit costs, especially labor, right as they finalize second half reserving, reinsurance, and vendor strategies,” Verisk explained.

Verisk did note the typical Q2 severe and convective weather events, which influence the property claims data each year.

Saying, “The Midwest emerged as a hotspot in Q2. Illinois and Ohio experienced surges in assignment volume driven by severe convective storms and significantly higher hail activity, while states such as Kansas and Iowa saw claim volume jump 73% and 95%, respectively.”

The data is helpful for gaining a picture of how property insurance claims are developing in 2026, especially so in a period where severe weather events can be impactful.

But most helpful is the clarity it provides on how severity trends, alongside inflationary factors, could result in larger industry losses than are perhaps expected when significant catastrophe claims events occur in future.

This has ramifications for those deploying capital into US property and catastrophe reinsurance in the US and should serve as a reminder than capital providers including ILS managers and investors need to stay aware of these trends and take them into consideration when negotiating key contract terms and features such as attachments and aggregate deductibles.