INSURANCE >>
What to Expect in 2022 Trends impacting Canadian apartment owners by Andy Schwartze As we move into 2022, there are two main developments in the world of insurance that are worthy of attention. The first relates to property insurance rates, and the second, to developments in the field of cyber insurance. Nobody needs to be reminded that property insurance rates spiked significantly over the past three years. When one compares what was being charged in 2018 versus now, the difference is significant. In part, the increase was triggered by a long-delayed rate adjustment that should have started way back in 2013. The fact that most insurers were reluctant to do so, in fear of losing business to less aggressive rate hikes by their competitors, simply delayed and thus more seriously impacted the inevitable pain to come. The push ultimately came from the numerically smaller, but very influential reinsurance community, whose influence on the cost of our insurance is typically underestimated. Most insurance professionals have a limited understanding of how reinsurance works, and how the four fundamental types of 32 | Canadian Apartment | Part of the REMI Network |
reinsurance support affect the ability of our insurers to accept and charge for their exposures. Properties that had once enjoyed seriously discounted rates were shocked to have their costs doubled. Typically, newer up to date buildings, constructed well and sprinklered, had been enjoying very thin property insurance rates. At the other end, older wood frame multi-residential buildings had also enjoyed pretty low rates, only to see them double or even triple. Both “extremes” found themselves under serious scrutiny. Some insurance professionals blamed COVID-19, but the pandemic has become a liability issue, not a property one. The “smart money” now believes these rate adjustments are mostly behind us and that 2022 will be a much more moderate year
