A Leading Driver of Rising Property Insurance Costs
When the eye of the storm wreaks havoc, many commercial properties are faced with the aftermath. In 2022, hurricanes, floods, tornadoes, wildfires and blizzards continued to strain the industry at an alarming rate. Already in 2023, there have been more extreme events in America that cost at least $1 billion, exceeding the 2020 record.* Catastrophes, the mounting costs of building materials and four other driving forces are increasing the cost of property insurance.
Property Rate by the Numbers
Catastrophe Losses:Over the past five years in the United States, 89 events have generated losses of more than $1 billion each.¹
Reinsurance: In early 2023, the gap between reinsurance supply and demand was estimated at $60 billion, three times what it was the previous fall.²
Property Replacement Costs:Over the past three years, the cost of structural steel increased by 55% and the price of lumber increased by 35%.³
Skilled Labor Shortage: The Associated General Contractors of America found that nine out of 10 contractors are struggling to find skilled labor and are delaying projects as a result.4