Real estate and hospitality insurance rates show signs of pending stabilisation: Gallagher
The real estate and hospitality insurance market could be headed for stabilisation as new capacity is increasingly present in a market left breathless by four years of solid rate increases, Gallagher said in its spring 2022 real estate and hospitality market update.
"We see signs of marketplace stabilisation," Gallagher analysts wrote. "For desirable business, like non-CAT-exposed accounts with clean loss history, incumbent carriers face new competition, while flat renewals or modest increases exist in pockets of the marketplace for best-in-class risks."
Caution remains firmly in place and insurers remain jittery over asset valuations and risk management and engineering; Gallagher warned.
Casualty lines remain subject to social inflation costs. “Carriers in the upper layers of insurance programs are increasingly wary of nuclear verdicts,” Gallagher notes. "Taking on higher deductibles or inserting small umbrellas to buffer excess liability may provide pricing relief."
Cyber coverage in the segment remains "deeply distressed” for all the same reasons that dominate cyber coverage across industries. 50 to 100% rate increases "are not uncommon" and robust risk management looks de rigueur.
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