Chubb Whitepaper Explores Factors Impacting Commercial Property Insurance Pricing
New paper combines the combination of climate change, historical supply chain crisis and higher inflation with the current impact of underwriting and pricing for commercial real estate exposures
WHITEHOUSE STATION, NJ, January 13, 2022 / PRNewswire / – Chubb has released a new white paper entitled “Why Commercial Property Insurance Prices Are Higher and What To Do About It” which examines the pricing pressures associated with the current state of commercial property insurance. In addition to explaining the complexities of complexities affecting the current state of underwriting, the paper outlines a number of key considerations and steps industry players can take to face challenging market conditions in the future.
Developed as a collaboration between Chubb’s retail business and its wholesale surplus and surplus lines division, Westchester, the white paper focuses on the convergence of three specific factors currently influencing the underwriting and pricing of commercial real estate exposures, including unpredictable weather events and climate change, a historic supply chain crisis, and inflation. The paper also highlights some of the difficulties involved in modeling risk, determining the replacement cost of real estate, and developing reasonable valuations of insured persons’ assets.
“Brokers and brokers are getting a lot of questions from their commercial risk managers and clients about the state of the property insurance industry, the implications for coverage costs and guidance on how to deal with difficult market conditions,” said Derek Talbott, Senior Vice President, Chubb group and Division President, North America Property and Specialty. “Chubb’s new whitepaper is designed to help them explain these issues and have more meaningful conversations about the right insurance and risk management solutions that are available to help policyholders in the current environment.”
“The insurance industry benefits from their many years of experience in successfully handling a wide variety of real estate risks,” added Scott A. Meyer, Senior Vice President of the Chubb Group and Division President of Westchester. “While the convergence of the three risk factors described in this paper presents unique challenges, our industry is well positioned to deal with them effectively and holistically. Therefore, now is the time to take a modernized and better informed approach to successfully addressing these “for the benefit of all parties, including agents and brokers.”
The story goes on
Key considerations in Chubb’s new white paper include:
Given the predictions for the future that will bring with them more frequent non-compliant weather disasters and associated insured damage, it is best to be careful about managing risk incentives to purchase power generators for unexpected power outages.
In anticipation of possible supply and labor shortages following a disaster, risk managers and property owners must consider the value of working with construction companies to ensure the availability of building materials and services in the event of a natural disaster that damages many properties in a region.
Industry stakeholders need to study in greater depth the challenges and their respective roles in developing more accurate and timely data on building conditions, local drainage systems, property and housing development trends, access to available construction materials and local construction personnel, and other information about risk of loss.
To ensure a more complete assessment of the replacement value of a building, more frequent and in-depth property damage risk assessments from qualified sources are required.
Download the white paper Why Commercial Property Insurance Prices Are Higher and What To Do About It.
Westchester is one of the largest and most diverse insurance companies providing commercial property and casualty insurance in The United States. Westchester is focused on the wholesale distribution channel, providing innovative specialty products for property, liability, environmental, occupational risk, inland shipping, product recall, small business, loyalty and programs. In addition, the business is characterized by exceptional financial strength, excellence in underwriting and outstanding expertise in claims processing. Westchester is a Chubb company. For more information about Westchester, please visit www.westchester.com.
Chubb is the world’s largest publicly traded property and casualty insurance company. With offices in 54 countries and territories, Chubb provides commercial and personal property and casualty, casualty and supplementary health insurance, reinsurance and life insurance to a diverse range of customers. As an insurance company, we evaluate, assume and manage risks with insight and discipline. We serve and pay our claims fairly and promptly. The company is also characterized by its extensive range of products and services, its broad sales capacities, its exceptional financial strength and its global local activities. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is part of the S&P 500 index. Chubb maintains board offices in Zurich, new York, London, Paris and other locations and employs around 31,000 people worldwide. More information is available at: www.chubb.com
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