Commercial property underwriting in the United States is undergoing a significant transformation, shaped by many complex factors. From the escalating threat of natural disasters to the ripple effects of global economic shifts, underwriters face multifaceted challenges that demand new and adaptive strategies. These challenges escalate the importance of accurately pricing risk and preventing higher losses and missed opportunities, which make it difficult for carriers to maintain profitability.

The industry is also experiencing “brain drain”, with almost 50% of the workforce projected to retire by 2028 and taking valuable knowledge and expertise out of the underwriting talent market.

This continuously changing environment tests the resilience of the insurance industry and necessitates a reevaluation of traditional underwriting models.

The current challenges

Commercial property underwriting is impacted by multiple factors, which include:

• Natural catastrophes and climate change
• Inflation and rising costs
• Adequacy of insurance-to-value
• Skilled labor shortage
• Coastal property challenges
• Reinsurance market dynamics
• Technological advancements and cyber risks
• Regulatory compliance
• Capacity constraints

Underwriters can manage these evolving challenges by proactively adapting their approach and exploring the following strategies:

• Improving risk assessment models, especially for catastrophe risks
• Leveraging advanced data analytics and AI for more accurate pricing
• Developing new products to address emerging risks
• Enhancing customer education on the importance of adequate coverage
• Collaborating with policymakers to create more resilient communities and properties

A solutions-based approach

Verisk offers a robust ecosystem of commercial underwriting solutions that provides carriers with a reliable, comprehensive, and integrated approach to commercial risk evaluation.

• ProMetrix^® is the industry-standard for commercial underwriting and delivers extensive, validated data for millions of properties. Available by API connection, ProMetrix ensures seamless integration with existing systems and streamlines the commercial underwriting process.
• LightSpeed^® Small Commercial accelerates small commercial underwriting with speed and automation. LightSpeed leverages its unique NAICS intelligence and Small Business database with over 30 million entities, plus pre-fill information from ProMetrix. Elevate underwriting and cut down on turnaround time with a 70% hit rate.
• 360Value^® helps carriers stay ahead of inflation and rising material costs with real-time replacement cost estimates. 360Value’s monthly updates ensure your policies reflect current market conditions, accounting for inflation and material and labor costs informed by Xactimate cost data. Utilize 360Value’s pre-fill information from ProMetrix to prevent underinsurance in the event of a total loss.

By combining these powerful tools, carriers can:

• Mitigate risk: Gain a deeper understanding of commercial property exposures with reliable, trusted data
• Streamline processes: Automate tasks, eliminate searching for data from third party vendors, and improve overall efficiency by integrating ProMetrix, 360Value, and LightSpeed Small Commercial into existing systems
• Drive profitability: The insights gained from Verisk drive more informed underwriting and pricing decisions that can help to enhance your bottom line

A trusted industry leader

Verisk’s tools are widely regarded as the industry standard due to their robust, verified data and intelligent automation, which empower insurers to make more informed underwriting decisions.

By providing highly accurate and integrated data solutions, Verisk helps insurers select and price risk, avoid premium leakage, and increase operational efficiency.

Are you ready to elevate your commercial property risk management? Contact Verisk today to learn more about our holistic solution offerings and how they can benefit your business.

By Gavin Mills ARM, CPCU, Joel Teemant, Roque Orts