LCRE, a provider of insurance solutions for the real estate market, has unveiled a new offering designed to address complex risks. The launch comes amid ongoing challenges within the sector, with the company’s announcement focusing on providing protection that extends beyond physical assets.
The company noted that slow survey turnaround times are making it difficult for insurers to accurately assess risks. Furthermore, securing comprehensive solutions through Managing General Agents (MGAs) is proving challenging, as many have limited capacity and require multiple insurers for relatively small risks. To combat these issues, LCRE has partnered with Crawfords and Orbis to provide streamlined solutions for brokers handling complex cases, developing a system that consolidates processes.
“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.
Challenging Market Conditions Persist
Insurers faced significant concerns last year, including the potential for a commercial real estate market downturn due to growing geopolitical tensions and global inflation. According to a report by Gallagher Re, trends suggested a downward revaluation of the legacy assets of insurers. Firms were likely to reevaluate their strategies regarding exposure within the commercial real estate market. Additional concerns revolved around employment in the post-pandemic era and the proliferation of remote work, which has led to an increase in office vacancies. These same issues continue to weigh on the industry.
According to John Morgan Partnership, the key factors shaping the commercial property insurance landscape for this year will be inflation, extreme weather events, and labor concerns. Although material cost inflation eased somewhat last year, a projected 3% build cost increase may continue, impacting property repair and replacement expenses which drive claims, as reported by the Building Cost Information Service. Severe weather events are increasing in both frequency and intensity, and are projected to cause significant property damage.
The report also indicated that insurers anticipate payouts of approximately £560 million in response to damages stemming from recent storms. Moreover, labor shortages have the potential to increase costs and extend the timelines for projects, which in turn may elevate associated claims costs. However, the use of technologies such as AI and 3D printing could potentially offset these risks.
