Real estate, hospitality property market improved: Gallagher

The real estate and hospitality property insurance marketplace has “improved” for most insureds with a general easing of rates while the casualty market is “more difficult,” according to a report Wednesday from Arthur J. Gallagher & Co.

Property prices remain elevated compared to pre-2023 levels, however, the report said.

Any degree of pricing improvement depends on the individual risk characteristics of an exposure, including geography, loss experience, asset class, valuation adequacy and program structure, according to Gallagher.

The most difficult property placements are for insureds with older, pre-1985 habitational risks or those with significant loss histories.

Meanwhile, capacity is constrained in casualty markets, especially for habitational risks. Gallagher said it is seeing rate increases ranging from high single-digits to up 15%.

Depending on loss history and account size, some seeking coverage are being pushed into the excess and surplus market where insurers continue to reduce the limits they are willing to offer, from $25 million to as low as $5 million, forcing insureds to engage multiple insurers in order to fill out placements and thus increasing costs.

Deductibles and self-insured retentions are increasing, with some reaching as high as $250,000 depending on the individual risk. This has led some larger insureds to explore alternative structures like captives to control costs.

The cyber insurance market is “highly competitive” due to an oversupply of capacity, but claims remain a concern.

“Despite the competitive environment, the frequency of claims remains high. This ongoing risk could impact future pricing and underwriting practices,” the report said.