Hot Residential Markets
and the Impact on Risk
Elizabeth A. Lowe
Senor Risk Management
Consultant
Robert M. Currey & Associates
Erik Davis
Los Angeles President and
Managing Director
R-T Specialty, LLC
Robert Gore
Executive Vice President
Willis Insurance Services of
California, Inc.
Geographic vs. Sector
 Geographic areas of largest growth / anticipated growth:
 Arizona, Texas, California, Florida, Carolinas, New York
 Sectors of growth/anticipated growth
• Apartments –everyone is building; have we reached
saturation?
• Single Family Detached – a lot of people still want a home in
the suburbs
• Condominiums – the new generation embraces urban living
and is less tied to the “picket fence” dream
Insurance Products
• Wrap-Up vs. Traditional
• Project Specific vs. Rolling
• OCIP vs. CCIP
• FLEX and other unique product offerings
Insurance Issues in Today’s Market
• Builders buying land at a fast pace again – creates problems for
the regional builders that can’t sit on land; but will we create
another bubble?
• Apartments being re-classified as residential in many standard
markets
• Staffing concerns of builders and vendors in the residential
sector
• Fallout from the recent REO craze (successor liability, CD, etc.)
• Proper accrual for potential losses in future years
• Horizontal exhaustion issue now a national issue
• Construction Defect in some states not being upheld by the
courts as an “occurrence”
• Texas changes
Market Trends for the Near
and Mid-Term Future
• Market starting to harden in the residential sector over past 12
months
• Capacity has been shrinking in residential sector over past 12
months, but a few markets are starting to talk about getting in /
or coming back in
• Apartment construction at an all-time high over past year; expect
it to continue in the near term
• Due to apartment boom, should we anticipate another condo
conversion theme starting in next few years?
• Texas, Carolinas, Florida anticipated to have large future growth
as well as an increasing number of urban in-fill projects
Elizabeth A. Lowe
Senor Risk Management Consultant
Robert M. Currey & Associates, Inc.
137 Newbury Street, 4th Floor
Boston, MA 02116
(617) 536-1750
elowe@robertmcurrey.com
Erik Davis
Los Angeles President and Managing Director
R-T Specialty Insurance Services, LLC
3400 W. Olive, Suite 350
Burbank, CA 91505
(818) 937-4265
edavis@rtspecialty.com
Robert Gore
Executive Vice President
Willis Insurance Services of California, Inc.
18101 Von Karman Avenue, Suite 600
Irvine, CA 92612
(949) 885-1226
robert.gore@willis.com