Why property insurance is changing

Property insurance is not only one of the most well-understood types of insurance, it has also been around for over 300 years. However, in recent years property risks are becoming less predictable as a result of both environmental, societal and political changes.

An enhance in both technology and machine learning are only a few of the ways in which companies are changing the way they operate in order to meet societal demands. According to PwC, rapid changes in the application of digital technology will continue to decrease the need for retail and office space, but rise the want for new types of warehousing, close to the customer.

Environmental factors are also an essential operator for property risks. The need to lessen emissions and diminish energy consumption, for example, will lead to innovative building design and materials, which may have distinctive risk characteristics. There is already a trend for industrial, commercial and retail properties to incorporate the use of green energy while also lessening their water consumption and reliance on single-use items, but these can bring enhanced or modified inception or damage risks.

As office spaces and factories become ‘smart’, the unpredictability of risks facing property is likely to multiply. Alongside a deviation in building usage, an increase in automation and a change in views towards more eco-friendly answers the nature of property exposures is changing. As are the risk mitigation practices companies can put in place. The insurance industry has surpassed at protecting against property risk for over three centuries but now, more than ever, the importance of risk management comes to the fore. While risk transfer mechanisms will continue to provide safety for companies, in the light of rising unpredictability, it is the union of insurance and risk engineering that will see businesses through the notions of an ever-shifting environment.

We at KGJ are on hand to assist in helping see your company through political, economic and social changes and help provide the right insurance for you. Call today on 01902 796 796 and we’ll be on hand to ensure that all your property insurance needs are met.

Lyndon Hollinshead