By Jessica Wright | Published in the NAREIM Dialogues, Spring 2024 edition p. 20-22
The exponential increase in insurable losses due to natural disasters and severe weather events has led to a crisis in the property insurance market, with premiums skyrocketing and policy cancellations, especially in coastal regions. In addition, rising construction costs and labor shortages have resulted in higher replacement values. For the commercial real estate (CRE) industry, the insurance crisis impacts how and which deals get done. Insurability and insurance premiums are now a priority consideration in acquisition underwriting.
In this article, Jessica Wright discusses how investors and insurers demonstrate resilience, quantify risk with customized data, and how firms can ensure they give the best possible underwriting presentation.