To rectify undervaluation, Westchester recommended more frequent and in-depth property risk appraisals that take into account more extreme weather events, potential supply chain hurdles and inflation trends. (Credit: investment/stock.adobe.com)
Commercial property insurance rates have shown significant growth in recent quarters, with Chubb Ltd. reporting a 12% year-on-year rate increase in the third quarter of 2021. Climate change's influence on natural catastrophes, supply chain challenges and inflation are working concurrently to push rates higher, according to a report from Westchester, Chubb's wholesale excess and surplus lines division.
In addition to driving up rates, the issues are making underwriting more challenging, according to Westchester. Further, inflationary pressures along with rising costs for labor and building materials are increasing the possibility for undervalued replacement costs.
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Steve Hallo
Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected]
