The Knowledge: commercial property

Click here to read the digital edition of The Knowledge focusing on commercial property insurance.

Competition for business is fierce in commercial property as rates continue to bump along the bottom. November’s edition of the Knowledge analyses the events that are shaping the market–recession, floods, cold winters and rising construction costs.

Our broker survey highlights how floods and the increasing number of unoccupied buildings affect business, and we ask brokers how insurers could help to improve market conditions. Price discrepancy between new business prospects and renewals was among brokers’ top concerns.

The London office market is under scrutiny as construction begins again on tall buildings put on hold during the recession. Landmark buildings require special attention, from conception to completion, and are on the whole seen as good risks. Although property supply is outpacing demand in the UK, the situation is far from reaching Dubai-like levels, where nearly 40% of commercial property is unoccupied.

Empty buildings are seen as risky, particularly in winter, but one broker respondent to our survey notes: “Some are very well managed and maintained, but they all get tarred with the same brush.” However increasing vacancy levels and the consequent high cost of escape of water claims has made profitable underwriting a serious challenge.

Finally, we introduce The People: the key movers and shakers in the commercial property market.