2022 Underwriting trends for houses of worship
Here are six major underwriting trends the insurance industry is likely to see in the coming year.
It has now been two years since COVID-19 began wreaking havoc on public health, the economy and the way much of our society conducts business. While many aspects of insurance underwriting have largely returned to the way they were before the pandemic, others will be forever changed — and not just because of COVID-19.
In 2022, we will continue to see the effects of wildfires and other destructive events, cybersecurity challenges and the use of the Internet of Things to prevent loss in facilities.
The following are six major trends in underwriting we will likely see in the coming year:
No. 1: COVID-19 will continue to impact businesses, nonprofits and other organizations in both operational and economic ways.
As time moves on, the question is not when COVID-19 will go away, but rather, which aspects of the pandemic will be most prominent in the coming months. As new coronavirus variants continue to emerge in different parts of the world, Americans wonder whether they will make their way to our country and sicken enough people to disrupt daily life. Masking is not an issue of the past, and organizations will have to determine if they can continue getting their people behind mitigation measures.
One big sticking point that promises to become more prominent in organizations is the possibility of vaccine mandates. Health care organizations and federal agencies have already taken a big step toward requiring protection from COVID-19, and other groups are sure to follow. This will spark lawsuits and other backlash, and organizations should be planning for those possibilities when they develop employment policies. Underwriters should be aware of the changing mandates and challenges that could lead to litigation.
No. 2: Catastrophe underwriting will play a complex role in addressing weather-related disasters.
Sometimes it seems like every time you turn around, there is another natural catastrophe causing significant damage in part of the world. This adds another complex layer to underwriting property perils on insurance quotes and renewals. When an insured makes specific decisions on building remodels, such as the type of shingles to use, how does that impact the policy options that may be available?
Manufacturers are becoming more innovative when it comes to adaptable materials, such as flame-retardant products. Does an insured’s use of such products qualify for a discount or provide more options for insurance?
No. 3: The Internet of Things is offering organizations more options for connecting with their buildings, potentially reducing significant loss.
Smart homes have led to smart businesses, nonprofits, daycare centers and houses of worship. Organizations have seen the benefits of using technology to reduce loss, and these devices will become more prevalent. Technology can be used to:
- Sense standing water in a building to indicate the presence of a leaky pipe.
- Detect intruders or vandals and alert staff through their mobile devices.
- Sound an alert when a person has fallen on ice or snow outside a building.
Underwriters should be cognizant of an organization’s use of preventive technology when assessing risk.
No. 4: Reviver statutes are changing the landscape of sexual abuse claims.
Americans understand the ramifications of childhood sexual abuse more now than they did even 10 years ago. As a result, reviver statutes are allowing adults to bring forward civil claims after the statute of limitations has passed.
or organizations in which adults interact with children, this opens up a much broader category of sexual abuse claims. Many insurance carriers are now restricting the capacity of their sexual abuse coverage because of this change.
Simply put, the awareness of sexual abuse claims is much higher now than it was in the past, and policies need to reflect that increase in risk. Underwriters will be carefully considering the wording of policies as well as premiums and limits.
No. 5: Cybersecurity risk continues to increase as organizations move many of their operations online.
The pandemic has sparked a massive move online that is unlikely to reverse. Houses of worship and nonprofits are soliciting more and more donations via virtual fundraising, and organizations of many types have embraced online meetings. However, this can lead to major cybersecurity problems. In fact, it already has, as hackers have taken advantage of people’s concerns about the economy and illness.
Underwriters will want to continue monitoring the rates of cybercrime and adjust policies accordingly. Organizations should have precautions in place to guard against cybercrime; otherwise, they become easy prey for criminals to steal information and involve them and their members in phishing schemes.
No. 6: Building and construction costs are rising, which means property values are increasing, too.
The U.S. economy is experiencing a combination of inflation and product shortages, leading to higher costs for both new construction and renovations. Therefore, the valuation process is becoming increasingly complicated. Because it costs more to build and change facilities, it will cost more to cover them in the event of an insurance claim. Policies will reflect those changes, which will affect premiums and limits.
Peter Mahler is vice president of religious markets underwriting at Church Mutual Insurance Company, S.I. Church Mutual is a stock insurer whose policyholders are members of the parent mutual holding company. To reach this contributor, send an email to corporatecommunications@churchmutual.com.
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