Property Insurance Faces Claims Volume vs. Severity Paradox in Q3 2025

The property insurance industry experienced its lowest third-quarter claim volume in five years at just over 1 million assignments, even as individual claim costs are projected to reach between $17,258 and $18,431 once fully matured—potentially making it one of the most expensive quarters on record, according to Verisk’s Q3 2025 Quarterly Property Report.

Total claim assignments fell 28.5% in Q# 2025 compared to Q3 2024, marking the continuation of a three-year downward trend that began in 2023, according to the report. Both catastrophe and non-catastrophe claims declined, with CAT claims dropping 32.7% and non-CAT claims decreasing 26.1% year-over-year.

The mild 2025 hurricane season in North America played a significant role, contributing to a 95% decrease in hurricane-related claims in the third quarter compared to the previous year. Wind and hail perils dominated the quarter, accounting for 51% of all claims combined.

Through the first three quarters of 2025, the industry processed approximately 3.5 million claims, putting the year on track to record between 4.3 and 4.5 million total claims—the lowest annual figure in the past five years, Verisk said.

Regional patterns revealed stark contrasts, according to the report. Texas maintained its position as the state with the highest claim volume at 136,870 claims, though this represented a 53% decline from Q3 2024. Wyoming experienced the most dramatic shift with a 6,479% increase in catastrophe claims due to a major hail event near Cheyenne on Aug. 1. Alaska saw a 429% increase driven by fire claims, while Vermont posted the largest decrease at 87%.

Cost Pressures Persist Despite Volume Relief

While lower claim volumes might suggest operational relief for insurers, severity trends tell a different story, the report said. The current Q3 average severity of $16,755 appears 3.3% lower than Q3 2024’s final figure of $17,328, but this number remains immature, Verisk said.

Historical patterns show that larger, more complex claims typically take two to three months to complete, causing initial severity figures to appear artificially low. For example, the report said, Q2 2025’s average replacement cost value (RCV), initially reported at $16,944, matured to $18,384—an 8.5% increase.

Applying historical maturation rates to Q3 data suggests the final average could range from $17,258 to $18,431, potentially ranking it among the highest severity quarters in recent years, Verisk said.

Strategic Considerations for a Shifting Landscape

The gap between declining volumes and increasing costs per claim suggests that favorable weather patterns may provide only temporary relief. As the industry moves into the final quarter of 2025 and plans for 2026, the data indicates that even in low-volume years, the financial impact of property claims continues to escalate, requiring sustained vigilance in underwriting, pricing and reserve adequacy, according to Verisk.

Obtain the full report here. &