6 2015 US Property Report

Year-End Claims Analysis

Total Value of Property Estimates per Month

In 2015, Xactware’s XactAnalysis network processed 4,296,544

estimates valued at $39,670,812,833—an increase of more

than $1 billion over the 2014 total of $38,569,780,316 for

4,218,586 estimates.

The monthly value of property estimates for January 2015 was

$2.4 billion—more than $620 million less than the January 2014

total. The lowest dollar value of estimates in a month was $2.36

billion reported in February.

Property estimate activity steadily rose and peaked at $4.1 billion

in May following widespread thunderstorms and flooding in

Texas and Oklahoma. The monthly value reached a high of $4.2

billion in July.

Average Value of Property Estimates per Month

The average value of a property estimate in 2015 was $9,233—

up $102 from 2014 but still below the 2013 average of $9,918.

The average value of a property estimate reflects both rising

rebuilding costs and the impact of catastrophes. Massive

storms that cause significant and widespread damage (such

as Superstorm Sandy in 2012) can drive up average estimate

values. Smaller storms that cause lighter damage to many

buildings—such as the March 2014 ice storms—can bring down

average values.

In May 2015, flooding and severe weather pushed the average

estimate value to the year's highest monthly average of $9,927.

Late summer severe weather pushed the average estimate

value to its second highest monthly total of $9,864

in September.

Average estimate values over the past five years are as follows:

2011: $8,902

2012: $9,227

2013: $9,918

2014: $9,131

2015: $9,233

6 2015 US Property Report

$10,000

$9,000

$8,000

$7,000

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

$0Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Average Value of Property Estimates per MonthAs reported to Xactware

2014 2015

Total Value of Property Estimates per MonthAs reported to Xactware

$1 billion

$2 billion

$3 billion

$4 billion

$5 billion

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 2015

Xactware’s 2015 Property Report

8 2015 US Property Report

Year-End Claims Analysis

Average Value of Property Estimates

by Type of Loss by Industry Type

Xactware tracks property estimate volume by loss type and

industry type to help property professionals identify emerging

trends. Industry types are grouped into five categories:

• Contractor

• Independent adjuster

• Mitigation provider

• Specialty provider (e.g., textile, furniture,

or art restoration firm)

• Staff adjuster

Staff adjusters accounted for 63.8 percent of all estimates reported

in 2015, independent adjusters uploaded 24.2 percent, contrac-

tors uploaded 5.6 percent, mitigation providers uploaded 5.9

percent, and specialty providers uploaded 0.5 percent.

The highest average estimate value in 2015 was $50,737

for fire losses reported by staff adjusters. That compares

to the 2014 fire-loss average for staff adjusters of $46,363.

Independent adjusters averaged $47,321 per estimate for fire

losses in 2015, and contractors uploaded fire-loss estimates

that averaged $23,055.

Contractor 5.6%

Mitigation Provider 5.9%

Specialty Provider 0.5%

Staff Adjuster 63.8%

241,709

1,040,887

253,294

21,122

2,739,100

Percent of Full-Cycle Claims by Industry TypeVolume of claims as reported to Xactware

Independent Adjuster 24.2%

Mitigation providers uploaded the lowest average estimate

value of $779 for theft losses.

A water loss was the most common type of estimate uploaded

by all industry types except for independent adjusters. Of all

estimates reported to Xactware in 2015, water losses accounted

for 28.1 percent of estimates from staff adjusters, 29.9 percent

of estimates from contractors, 40.3 percent of estimates from

specialty providers, and 61.3 percent of estimates from mitiga-

tion specialists. The most common type of loss uploaded by

independent adjusters was a hail estimate (32.3 percent).

Average Value of Property Estimates by Type of Loss by Industry TypeAs reported to Xactware

$10k

$20k

$30k

$40k

$50k

Collapse7,323

Fire171,795

Hail990,232

Lightning50,596

Smoke14,378

Theft254,173

Vandalism43,804

Vehicle47,396

Water1,272,071

Wind554,536

Other890,342

Contractor Independent Adjuster Mitigation Provider Specialty Provider Staff Adjuster

8 2015 US Property Report

Year-End Claims Analysis

16 2015 US Property Report

Material and Labor Cost AnalysisReconstruction Cost Index

Xactware’s Reconstruction Cost Index grew 3.66 percent in

2015—slightly less than the 4.17 percent increase of 2014.

Catastrophes had very little impact on local building costs in

2015. The U.S. Department of Energy also reports that fuel costs

dropped 38.4 percent from January 2014 to the end of 2015.

Fuel costs have a significant effect on construction materials,

especially petroleum-based products such as nylon carpet

fibers and composition roofing. Rising fuel costs consistently

lead to a rise in material prices, but falling fuel prices rarely

result in more than a slight decrease in material costs.

In a light catastrophe year with falling fuel costs, overall growth in

the economy is the primary cause of rising reconstruction costs.

Notable statistics:

• The national average increased 3.66 percent.

• No states reported a decrease.

• 27 states showed an increase larger than the

national average.

• New Hampshire (6.15 percent) and Nevada (5.87

percent) reported the largest increases.

Xactware’s Reconstruction Cost Index ranks states by the

percentage of change in rebuilding costs over the past year.

It is not a ranking of the cost to rebuild. When ranking by the

actual cost to rebuild, Hawaii, Alaska, and Washington, D.C., are

the top three in total rebuild costs, while Arkansas, Kentucky,

and Tennessee have the lowest costs.

Xactware’s Reconstruction Cost Index tracks the cost to rebuild

a variety of homes in all 50 states and the District of Columbia.

The index displays percent change of rebuild costs from fourth

quarter 2014 to fourth quarter 2015.

Please note that Xactware changed the way it calculates values

in its Reconstruction Cost Index in 2014. In previous years, this

index was tabulated by comparing the first quarter to the fourth

quarter. Beginning in 2014, the index was calculated by compar-

ing fourth quarter to fourth quarter.

Percent Change of Cost to RebuildAs reported to Xactware

New Hampshire

Nevada

Maine

North Dakota

Idaho

Washington

Montana

Wisconsin

Oregon

Illinois

Utah

Minnesota

Massachusetts

Vermont

Michigan

Georgia

New Jersey

Indiana

New York

Connecticut

Wyoming

Kentucky

Ohio

South Carolina

South Dakota

Kansas

Colorado

Iowa

Maryland

Pennsylvania

Virginia

California

Rhode Island

New Mexico

Alabama

Mississippi

Arkansas

Tennessee

Florida

Delaware

Alaska

Missouri

Nebraska

Texas

Louisiana

Arizona

West Virginia

Oklahoma

North Carolina

Washington, D.C.

Hawaii

0% 1% 2% 3% 4% 5% 6% 7%

0% 1% 2% 3% 4% 5% 6% 7%

6.15%

5.87%

5.44%

5.33%

5.33%

4.91%

4.71%

4.65%

4.63%

4.46%

4.35%

4.33%

4.28%

4.19%

4.12%

4.04%

3.96%

3.87%

3.78%

3.75%

3.65%

3.65%

3.61%

3.57%

3.56%

3.49%

3.49%

3.47%

3.44%

3.42%

3.38%

3.38%

3.37%

3.37%

3.37%

3.35%

3.29%

3.27%

3.26%

3.22%

3.21%

3.17%

3.11%

3.05%

3.02%

2.89%

2.86%

2.79%

2.77%

2.73%

1.89%

16 2015 US Property Report

Material and Labor Cost Analysis

7%

6%

5%

4%

3%

2%

1%

0%

-1%

-2%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

Year-Over-Year Reconstruction Cost ChangeAs reported to Xactware

6.0

1%

4.7

8%

6.3

9%

4.17

%

3.9

7%

0.9

4%

-1.4

0%

1.3

5%

1.4

8%

3.4

4%

4.17

%

3.6

6%

Year-End Claims AnalysisTotal Value of Property Estimates per MonthAverage Value of Property Estimates per MonthAverage Value of Property Estimates by Type of Loss

Material and Labor Cost Analysis