LCRE, which provides insurance solutions for the real estate market, has introduced a new solution designed to address complex risks.
The offering provides protection beyond physical assets and comes as the market continues to face challenges. The company said slow survey turnaround times make it difficult for insurers to assess risks, and there are also difficulties in securing comprehensive solutions through MGAs, as many have limited capacity and require multiple insurers for relatively small risks.
To address these issues, the company has partnered with Crawfords and Orbis to provide solutions for brokers handling complex cases. It has also created an approach that seeks to streamline broker processes into one solution.
“By establishing a robust professional ecosystem, we’re proud to deliver a seamless collaboration of underwriting, risk management and service, all under one cohesive and credible network,” said Daniel Keehan, head of real estate at LCRE.
Last year, insurers were concerned about growing geopolitical tensions and global inflation potentially causing a major downturn in the commercial real estate market.
According to a report by Gallagher Re, trends suggested a downward revaluation of the legacy assets of insurers, with firms likely to reevaluate their strategies when it comes to relative exposures to the CRE market. There were also concerns about employment amid the post-pandemic era, as well as the rise of remote working setups that led to the increase in office vacancies.
These concerns remain. According to John Morgan Partnership, inflation, extreme weather and labour concerns will be the key factors that will shape the landscape of commercial property insurance this year.
Despite some easing in material cost inflation last year, a projected 3% rise in build costs may persist, affecting property repair and replacement expenses-related claims, as reported by the Building Cost Information Service.
Severe weather, which is growing more frequent and more severe, is also projected to cause substantial property damage. According to the report, insurers are anticipating payouts of about £560 million for damages caused by recent storms.
Meanwhile, labour shortages could also result in projects becoming more expensive and taking longer to complete, which could increase associated claims costs. However, this risk may be offset by the use of technologies, including AI and 3D printing.
