Tim Crowley, SVP at Alliant, and Christian Hartman, underwriting manager, large commercial/REIT at Arch, participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.
Crowley and Hartman offered insights into insurance trends and the Nareit Directors & Officers (D&O) liability insurance program. Crowley noted that Alliant has been partnering with Arch for more than 30 years.
Hartman pointed out that after years of elevated securities class action (SCA) activity from 2016 to 2020, there have been fewer filings due to decreased M&A activity. Taking M&A filings out of the equation, core SCA filings are still relatively flat year over year but are up about 4% versus historical norms, he said.
Hartman also said that the past three years have seen a “hard” D&O market that was attributable to years of above average claims activity, lost cost inflation, and fear of claims arising out of the pandemic. In 2022 and 2023, he said, “we’ve seen a gradual softening of the market and the same holds true for REITs as well.”
In the REIT space in particular, Hartman said, “we didn’t see the significant adjustments and pricings and retentions as we did in the broader D&O space. While the REIT market did harden, there’s definitely been a lot more stability in the program, in the Nareit membership, and that’s reflective of our view of the program and how REITs have performed over the long run.”