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Complex property risks create challenging market

From unexpected events to economic headwinds, property owners seeing more uncertainty

By Cathy Miller | Head of Property U.S. and Canada, Berkshire Hathaway Specialty Insurance

Economic, social and environmental trends are combining to create significant risks and challenges for property owners and their insurers.

Across industries, from manufacturing to real estate to healthcare, some of the same themes are present. These include changing valuations of physical assets and higher replacement costs, supply chain issues, and contingent time element exposures. Supply chain risks became particularly severe when the coronavirus pandemic struck, and many businesses see continuing problems in their supply chains.

In addition, the global economy has fundamentally shifted. Inflationary pressures and labor shortages are making it harder for businesses not only to keep operations running smoothly but also to maintain consistently safe practices. Higher expenses are squeezing many property owners’ margins, leaving fewer resources available for risk transfer than in the past. At the same time, labor shortages present numerous risks for property owners, which may lead to an increase in losses.

Not least, environmental factors are adding complications. Unpredictable – and unfunded – losses from severe weather during the past few years have led to a challenging market for property risks.

In February 2021, for example, Texas experienced a severe winter storm that brought extreme cold, ice, sleet and snow, and led to widescale power outages. According to the Texas Department of Insurance, the event generated more than half a million claims and resulted in an ultimate loss estimated at more than $11 billion.1 In December 2022, Winter Storm Elliott caused damage across 42 states, totaling an estimated $5.4 billion in insured losses.2

Risk awareness needed

As property schedules get larger, property owners need to be more aware of the risks and exposures they face. With bigger portfolios of physical assets, the more likely they will experience multiple types of losses. Property risks have become more complex, and that trend is likely to continue.

As a result, property insurance underwriters also have needed to increase their own awareness and knowledge because of these risk trends. Underwriters today are expected to be subject matter experts in many different building occupancies instead of specialists.

For example, a property underwriter might be asked to consider vacancies in retail and office spaces, or the impact of broken pipes and water damage in various types of facilities. Similarly, when writing manufacturing accounts, underwriters need to understand how things are made, the potential for losing business contracts, and the risk of battery storage and fires.

Data driving risk mitigation

As properties and their operations evolve, data is key to risk mitigation. Risk professionals, their advisors and insurance company partners all need to have more data to fully understand property risks and how best to mitigate losses.

It is important to partner with a strong engineering provider to gather valuable data for their insurance company partners.  Whether a property owner has a small or large schedule of insured assets, there are always improvements to make in reducing exposure and minimizing loss. A knowledgeable engineering provider can assist in identifying areas where risk mitigation can be enhanced and prove valuable information to insurance companies. 

With more data and understanding of property risk, innovations in risk transfer are possible. One example at Berkshire Hathaway Specialty Insurance is BH FastCATSM, a parametric solution designed for earthquake and wind-driven exposures. BH FastCATSM enables property owners to supplement their traditional coverage with a multiyear policy and quick recovery in the event of a claim.

Thinking long-term

Now is a good time for property owners to position their risk management and insurance programs for the long term. Economic conditions change over time, leading to shifts in market cycles. To prepare for these shifts, risk professionals should consider what retentions and deductibles their organizations can maintain, ensure property values are up to date, and think about how to capture risk data for their insurers. Playing the long game in risk management will ease some of the challenges the current market is presenting.

For more information about property solutions and resources, please visit

1 “Insured Losses Resulting from the February 2021 Winter Weather Event,” September 19, 2022; Texas Department of Insurance;

2 “Winter storm could cost insurers $5.4 billion: KCC,” Business Insurance, December 29, 2022;$54-billion-KCC

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Cathy Miller is Head of Property U.S. and Canada at Berkshire Hathaway Specialty Insurance. In this role, she oversees the company’s general property, energy, builder’s risk and marine business in the United States and Canada. During her career, she has held various executive leadership positions in property underwriting.

Berkshire Hathaway Specialty Insurance ( provides commercial property, casualty, healthcare professional liability, executive and professional lines, transactional liability, surety, marine, travel, programs, accident and health, medical stop loss, homeowners, and multinational insurance. The actual and final terms of coverage for all product lines may vary.  It underwrites on the paper of Berkshire Hathaway's National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor's. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Boston, Chicago, Dallas, Houston, Indianapolis, Irvine, Los Angeles, New York, San Francisco, San Ramon, Seattle, Stevens Point, Adelaide, Auckland, Brisbane, Brussels, Cologne, Dubai, Dublin, Frankfurt, Hong Kong, Kuala Lumpur, London, Lyon, Macau, Madrid, Manchester, Melbourne, Munich, Paris, Perth, Singapore, Sydney, Toronto and Zurich.

For more information, contact [email protected].The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.

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