2024 Commercial Property Insurance Trends

While the price of property insurance depends on a business owner’s industry, associated risks, location, and building age, other factors can impact the property market. These factors include drastic rate increases, growing underwriting losses, a difficult reinsurance renewal period, and reduced capacity.

Additionally, the frequency of natural disasters such as hurricanes, earthquakes, floods, wildfires, and tornadoes can significantly impact insurance claims and premiums for the carrier. This is due in part to climate change, which leads to more frequent and severe weather events. Rising sea levels, changing precipitation patterns, and extreme temperatures can also affect commercial property insurance costs.

The three property insurance market trends we identified are:

• An increase in losses driven by historically non-modeled secondary perils
• Reinsurance costs
• Underinsured properties

By understanding and adapting to these trends, companies can better navigate uncertainty and emerge more resilient.

Businesses should protect against events like data breaches, property damage, or equipment failure that are often overlooked and underestimated to ensure they lose less money. To determine if companies are moving in the right direction, they can benchmark their property insurance program against industry peers and best practices to identify successes and areas for improvement. By setting key performance indicators, companies can measure the effectiveness of their risk management and insurance strategies over time and determine if they’re properly adapting to trends.

In 2023, reinsurance was at an all-time low. However, as more optimism enters the reinsurance market, companies can think about what types of previously restricted perils they’d like to cover. This will help them be better protected and prepared for events they might not have been able to afford.