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Insurance premiums set to drop in 2024; but ESG, risk and A&E can work closer to achieve even lower reductions

NAREIM Sustainability Meeting key takeaways

March 7, 2024

Insurance premium increases are starting to ease – with expectations that 2024 renewals could be in the low single digits or possibly reduced.

In Q4 2023, commercial property premiums increased 11.8%, down from 20.4% in Q1 2023, according to the Council of Insurance Agents & Brokers (CIAB). With that downward trend expected to continue in 2024, NAREIM members gathering in Atlanta for the Sustainability meeting discussed ways to mitigate and further reduce premium increases.

The key? For firms ESG, risk/insurance and architecture, engineering and development teams to work more closely to help fully explain a property’s sustainability measures and secondary characteristics.

Secondary characteristics are vital to communicate – and that needs to be understood by your risk managers who negotiate with insurers and brokers. Ideas included:

  • Review the Statements of Value together and understand every improvement and measure done at the asset or portfolio-level.

  • Focus on COPE, the four property risk characteristics an underwriter reviews when evaluating insurance premiums. Construction, occupancy, protection and exposure.

  • Key areas include: construction quality, cladding type, roof sheathing, frame-foundation connections, opening protections as well as flood duration, flashing, roof anchors.

  • All sustainability measures should be communicated as these can also impact the assessment of a building’s resiliency.

As one speaker said: “It’s a buyer’s market again.”

Other measures discussed in Atlanta included:

  • Consider captive insurance schemes, where firms own the insurance and take potential losses. Members were advised to “buy insurance like an insurance company, not as a consumer”, with real estate firms now the largest market for captive schemes. If property premiums are above $10m a year, it’s time to “start looking at alternatives”, members were told.

  • EV charging: Insurers are starting to pay attention to the fire risk of EV charging stations, storage and lithium batteries in properties. Make sure to place chargers near exits/entrances with easy fire truck access or ideally outdoors.

  • Leak detection: Water damage is one of the biggest payouts for insurers so installing leak detectors can make a material difference to insurance negotiations.

  • Footnote CLT construction. While there isn’t a code to account for CLT/timber construction, footnote it and point it out with brokers or face being penalized by insurers who assume an average or worst case scenario for build quality and resiliency.

  • Report accurate property values on a psf basis and when damage occurs provide all the data. 20% of a schedule will drive 80% of the cost of the premium, so focus time and energy on those red flags.

The attendee list and presentations can be accessed by emailing IvyLee Rosario at

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