Christian Hartman of Arch Insurance and Stephen Kelly of Alliant Insurance sat down for a video interview during Nareit’s REITwise: 2025 Law, Accounting & Finance Conference in San Antonio on March 25-27.
They shared insights into rising securities class actions (SCAs), market dynamics, and how REITs are navigating evolving risks.
Hartman explained that core SCAs—those related to accounting or disclosure issues—rose by 4% in 2024 compared to the prior year, and 14% over historical averages. “We’re also seeing average market cap loss within class periods expand, which we think will continue pushing up settlement values even higher,” he said.
Hartman also noted the impact of short-seller reports: “These…reports often reveal negative information…they almost serve as a playbook for a plaintiff’s firm to bring about litigation.”
Turning to D&O program strategy, Kelly emphasized how Alliant works closely with Arch to tailor solutions specifically for REITs.
“We work with Nareit membership and Arch, understanding the intricacies of REITs and really building a risk appetite,” Kelly said. “Because of the understanding we have…we have a better solution than what you can get in the general market.”
Hartman also observed that while REIT litigation frequency remains low due to their limited market size, severity can still mirror broader public market trends. “Our goal as the REIT carrier is to be a stable capital provider for REITs in all parts of an insurance and real estate cycle,” he said.