High net worth insurance specialist PURE Insurance has revealed that its direct combined ratio for 2023 fell to 102.2%, an improvement compared to the last two years, mainly due to stricter underwriting guidelines, pricing enhancements, and management’s efforts to reduce operating costs.
However, while the firm noted it is pleased to see an improvement, “more is needed” to fully cover the cost of reinsurance protection.
PURE explained that despite its positive relationships with reinsurers and niche portfolio of members, it was not immune to the industry-wide rise in reinsurance costs, which increased by over 40% in 2023.
“PURE will continue to maintain a reasonably conservative reinsurance program to offset potential volatile underwriting results and is expecting more stable reinsurance market conditions in the upcoming program renewals,” the firm added.
Looking at some of the most impactful catastrophe events in 2023, PURE observed that the winter storm at the start of the year drove 155 membership claims totalling more than $26 million in losses.
According to PURE, Nearly 90% of those claims were related to burst pipes, including 13 large losses that drove about half of the cost.
Meanwhile, the Convective Storm in the Midwest in April, which devastated several counties in Illinois, resulted in more than $12 million in covered losses among 161 members.
2023’s extreme weather also included the deadliest wildfire Hawaii has seen in over a century. Commenting on this, PURE said, “All of our PURE members there are safe, thankfully, but 28 of them experienced losses and filed claims that totalled more than $27 million in damage.
“To date, this number continues to grow as our claims professionals continue to help impacted members through the rebuild process.”
Elsewhere, PURE also revealed that direct written premiums increased by 14% in 2023 and that it finished the year with more than 113,000 members. The firm’s renewal retention also remained strong, with 94.1% of members electing to stay.
Providing more commentary on the results, Martin Leitch, PURE CEO, said, “In 2023, we handled over 37,000 claims—a record number for PURE—helping more families than ever resolve damage to their properties or defend their interests.
“We are thrilled to see that, in this year of record setting claims volume, our Customer Satisfaction Score was excellent at 90%. So, while we aim to prevent as many losses as possible for our members, in the event you have a claim, you can expect exceptional service.
We have, without a doubt, provided exceptional value to members in the way of cost savings. Each year many of our members kindly disclose the savings generated by moving their insurance to PURE. On average, members have reported saving 17% on their homeowners insurance when they joined PURE, which translates to over $1.3 billion saved since our inception in 2007.
“Notably, these savings are inclusive of paying surplus contributions during the first five years of membership. Even with premiums increasing in recent years, new members who joined PURE in 2023 still reported meaningful savings.”
