2023 Underwriting trends for houses of worship
The new year brings an opportunity to revisit underwriting strategies and adjust them as needed.
As we dive headfirst into 2023, the following are five major trends for houses of worship that we are likely to see over the next year.
No. 1: Reviver statutes are creating more avenues for sexual abuse claims.
Simply put, a reviver statute is state legislation that allows adult survivors of childhood abuse to bring forward civil claims after the statute of limitations has passed. For organizations like houses of worship in which adults interact with children, this opens up a bigger category of sexual abuse claims. Underwriters will want to take great care in how they word policies, and make sure limitations are appropriately adjusted.
No. 2: Smart buildings provide older houses of worship with more opportunities.
Many ornate structures with original electrical, plumbing and other building systems are rapidly deteriorating. House of worship leaders want to know how they should best spend their often-limited funds. Insurers can help their customers understand the risks and benefits of upgrading their facilities. They also may be able to introduce these congregations to the concept of smart buildings — technology that can help them monitor hazards like standing water, intruders and other incidents such as a visitor falling on ice or snow.
No. 3: The need for cybersecurity has increased.
Shutdowns due to the COVID-19 pandemic turned online worship into the norm, not the exception. But even as congregations began to resume in-person worship, their members appealed to keep some services online. That means houses of worship have become much more vulnerable to cyberattacks and network problems.
Insurers 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.
The following are five of the most important ways congregations can lower their cybersecurity risk:
- Create a written Internet Use and Access Policy and provide training on the policy to all staff and volunteers.
- Provide cybersecurity training to their employees upon hire and periodically throughout the year.
- Use multi-factor authentication in addition to passwords or pass phrases, along with a VPN for an added layer of protection for their internal systems and data.
- Keep software and apps on all internet-connected systems up-to-date, and delete unused apps to reduce the risk of infection from malware or ransomware.
- Require permission to access their Wi-Fi network, and do not broadcast their network name, or SSID (Service Set Identifier).
No. 4: Property values are rising.
Due to inflation, supply chain problems and labor shortages, building costs are soaring, which means houses of worship are likely worth much more than they were just a few years ago. This makes the valuation process especially complicated and should be part of the renewal discussion. Underwriters will need to keep a close eye on the cost of property valuations and how that might impact insurance decisions for a given congregation. The last thing anyone wants is for a customer to make a claim for a total loss only to discover they are underinsured because their property valuation was low.
No. 5: Catastrophe underwriting is at one of the highest levels it’s ever been.
Because of a number of factors, there are many more incidences of hurricanes, wildfires and other catastrophic events that are effecting certain areas of the country. This adds more complexity to underwriting property peril on insurance quotes and renewals. Manufacturers are creating more durable options, such as flame-retardant side and impact resistant roofing products. Underwriters need to determine whether a customer’s use of such products qualify for a discount or provide more options for insurance.
Insurers should continue to watch for opportunities to help their customers obtain the maximum coverage and peace of mind for a reasonable amount of money.
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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