Real Estate
Property › Increased capacity in the Property market led to heightened competition in 2024, a trend expected to continue through 2025. Carriers are focusing on account retention, growth and profitability, signaling rate moderation. Despite some softening due to new entrants and increased capacity, there is still pressure in the Property market, particularly concerning real estate. Carriers remain focused on property protections, CAT- exposed risks and asset classes, with certain risks continuing to face challenges. › Coverage enhancements should be explored for all property risks, especially at renewal. The hardening market led to the elimination of many blanket policies and reduced loss limits, which should be revisited along with broader policy forms, higher sub-limits and optimized deductibles. CAT limits and deductibles should also be reassessed. › Significant rate decreases are expected for loss-free and best-in-class accounts on shared/layered placements, with targeted decreases between -5% and -15%. More loss-prone accounts could see rate increases of up to +10%, while others may remain flat depending on loss history. Single carrier placements will experience different results, but flat renewals should still be targeted, with marketing efforts to outside competition to apply pressure on incumbent markets. Improvements in terms and conditions should also be explored alongside seeking rate relief from insurers. › The California wildfires in early 2025 are anticipated to shift carrier focus to these exposures, with wildfire scores closely examined. › Valuations will be less of a hot-button issue in 2025 but still require consideration, especially for older buildings or portfolios undervalued during the 2024 renewal. Many owners are looking to refinance or purchase distressed assets, prompting mortgage lenders to reassess valuations. Despite providing blanket coverage in a portfolio, lenders may request higher valuations for certain assets. It is crucial to review valuation methodologies with clients and challenge lenders on their calculations.
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