2022 Multi-Family Mid-Year State of the Market

2022 Multi-Family Mid-Year State of the Market

2022 marks another year with a hardened market. The soft market ended in late 2018 and is not expected to return anytime soon. Because of macroeconomic trends, the market continues to harden. As a result of this, underwriters are expected to continue viewing the
multifamily asset class with caution for the foreseeable future. We can also expect underwriting guidelines to become more fragmented based on asset characteristics and location.

Real Estate owners and property managers need to differentiate their risk profiles by highlighting strong risk management protocols, operational controls, and claims management policies. It is imperative that these processes are clearly communicated with underwriters.

Underwriting Trends

Labor Shortages

Underwriters, particularly those working for carriers with an appetite for habitational accounts, simply have more submissions than they have time to work on. This is due, in large part, to staffing constraints across the workforce. We also believe that carriers have an interest in limiting the number of submissions their teams can process. Simply put, no carrier wants to open the flood gates and lose control of the accounts they are writing by hiring inexperienced underwriters who may push to put new business in the books without applying diligent underwriting standards.


Carriers continue to develop in-house modeling capabilities, with most relying on, commonly used, CAT modeling. While the best underwriters use models only as a guide, models and prescreening systems often help carriers determine on which submissions to focus. They want to allocate time to accounts that these processes indicate are likely to be won.

What to do about it:

The submission process needs to be controlled and planned. The days of sending generic submissions to every carrier under the sun and expecting competitive terms in return are over. Additionally, asking an underwriter to quote excess property layers ten different ways yields poor results. Your insurance broker needs to pre-underwrite your account, and design a marketing plan that appeals to carrier appetites for risk. Providing a clear direction to underwriters by painting a favorable picture of your exposure will render the best outcome.

Real Estate owners and property managers need to view submissions to carriers as a proposal. Underwriters, especially those likely to offer competitive terms, have more leverage in a hard market. Viewing and treating the marketing process as a partnership between the insured and carriers yields better terms and more transparency, as well as improved turnaround times for feedback from carriers.

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