Christian Hartmann, AVP at Arch, and Steve Kelly, Director of Alliant Insurance Services, participated in a video interview during Nareit’s REITWISE: 2024 Law, Accounting & Finance Conference, held March 19-21 in Hollywood, Florida.
Hartman and Kelly provided insight into the current insurance landscape for REITs, focusing on emerging trends such as securities class actions (SCAs) and sustainability.
Hartman saw a 26% year-over-year increase in core securities class action filings, highlighting the increase in lawsuits against traditional public companies despite the decline in IPOs and SPACs. He said the dismissal rate remains stable at 50%, yet increased defense costs pose a financial risk even for rejected claims. With respect to REITs, he noted observing three main SCA filings in 2023 within the REIT sector, including similar dispositions of non-REIT companies.
He also discussed the increasing emphasis on ESG factors in light of the increased regulatory and investor focus. He emphasized the challenges posed by differing disclosure requirements in different jurisdictions, which can strain resources and increase litigation risks.
In the context of the insurance market, Kelly discussed market cycles, highlighting the recent softness in the D&O (directors and officers) market after a previous difficult cycle. He noted stabilization in pricing for 2024, indicating healthy industry conditions.
Ark recently published a report explaining what companies should know about the new ESG disclosure requirements, and it includes a comparison of recent disclosure requirements from the SEC, California, and the EU. reading newspaper,
Arch is the primary carrier supported for the Nareit Directors & Officers Liability (D&O) program, providing market-leading, comprehensive REIT-specific coverage to Nareit members. The Nareit D&O program is powered by the expertise and extensive resources of Arch, Nareit and Alliant Insurance Services, which serves as the exclusive program administrator.
