State of the Insurance Market Report

2024 Initial Outlook:
Property Insurance

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Market Updates

Today’s commercial property market is one of the most challenging we have ever faced. Pricing is the highest we have seen in over 30 years, with no signs of slowing.

Relentless severe weather events are driving treaty and facultative reinsurance rates higher and causing reinsurers to reduce their aggregate exposures to catastrophic risks. This puts pressure on primary insurers to increase rates and reduce the risks they write. Hard market conditions will extend into next year.

Rain storm cloud aerial view.In 2023, rate increases ranged from 10% to 15% for businesses with:

  • Favorable loss experience
  • Adequate property and business interruption (BI) values
  • A good risk profile
  • Little to no catastrophe (CAT) exposure

Occasionally, rates remain flat or dip slightly on accounts that measure up in all categories. Companies that don’t check these boxes are experiencing rate increases of 50% or more.

The following factors continue to affect the property market:

  • Severe convective storms lead the market in aggregate losses, ahead of hurricanes: For 2023, Swiss Re has estimated insured natural catastrophe losses at $100B, with severe convective storms (or thunderstorms) the largest driver of loss, accounting for $60B of the total. These events are increasing in frequency and severity, making it difficult for insurers and reinsurers to diversify portfolios.
  • More regions are experiencing climate change-related damage: Devastating losses are occurring across the nation, not just on the coasts. “Tornado Alley” has expanded East. Missouri saw flash floods and landslides last year. Freezes, wildfires, wind, and convective storms have pounded Texas. As more people and businesses move to storm-prone areas, losses will only grow.
  • Supply chain disruptions persist for products and supplies: These continued challenges affect business interruption (BI) and contingent BI coverage. New construction projects that require specialized equipment experience long lead times — procurement can take between 12 and 24 months.
  • New underwriting criteria is trending: Insurers in certain regions are now including crime scores in their decision-making process.

Coverage Considerations

Adverse property market conditions continue to affect all industries. Particularly challenging risks include:

  • Habitational real estate
  • Entertainment
  • Waste and recycling
  • High-hazard businesses (e.g., paper and chemical)
  • Frame construction properties (apartments, hotels, and senior living facilities)
  • K-12 schools and other publicly funded entities

Some difficult-to-insure properties require multiple policies from different carriers to ensure adequate coverage. Assembling these complex insurance programs can be challenging.

Underwriters are still very focused on adequacy of property damage and business interruption values.

We do not expect the market to soften anytime soon. The insurance market would likely further tighten with any additional major weather events striking the U.S.

Rate Forecast
High Quality Risk/No CAT/Favorable Loss History: +10% to +15%
Poor Quality Risk/CAT/Unfavorable Loss History: +50% or more


  • Work with a field appraisal firm to ensure property, business interruption, and replacement cost values are adequate and up to date. Keep in mind it can take six to nine months for an appraisal to be completed and a report issued.
  • Start the renewal process as early as possible — 90 to 120 days in advance.
  • Clean up outstanding property loss prevention recommendations that appear in inspection reports, including engineering recommendations with material capital expenditures.
  • Invest proactively in risk management measures. This will reduce your cost of risk and demonstrate steady risk improvement to underwriters.
  • Have a business continuity plan in case catastrophe strikes.

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The contents of this report are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.