The real estate industry has proven its resilience with careful management and flexibility throughout the pandemic. With the increase in e-commerce, both the industrial and warehousing sectors are flourishing. The habitational sector endured once again with the help of government support and rising rents in the current housing market. And, despite the change to a work-from-home lifestyle, the office and commercial sectors are experiencing a bounce back. Although big box retail businesses, hotels, and large mall retail businesses are still experiencing a decline, those that adapt by repurposing their usage will thrive.
A hard market persists despite the volatility in the insurance market beginning to ease. Relentless catastrophic weather events, social inflation, nuclear verdicts, and cyber threats continue to impact market conditions. To continue to survive and thrive, real estate operators, owners, managers, and developers must work diligently to avoid and mitigate costly exposures.
In a future post-pandemic world, virus variants could threaten all industries and real estate is no exception. In this environment, proactive risk management is crucial. Insurance premiums are rising significantly for the same or less coverage. Even insureds with few to no claims are experiencing higher rates and deductibles with reduced coverage. This is especially common for portfolios containing assets with historically unattractive risk characteristics and poor loss performance, including older apartments and hotels. This is a trend we’ve seen over the last several quarters and expect it to continue because of the rise in catastrophic events and increased underwriting for secondary perils.
Our recent Insurance Insights shares five questions for real estate executives to ask themselves to make sure you are minimizing your company’s risk for a limitless future. Download the full report and reach out to your local MMA broker today to discuss how we can best serve you in the real estate sector.
