Most Owners Willing to Insure Less of Their Property to Cut Costs: Nationwide

Why It Matters

Rising climate‑driven losses are inflating commercial property premiums, so any strategy that reduces exposure or leverages data‑driven risk controls can reshape underwriting economics and protect bottom lines. The trend signals insurers will increasingly reward IoT adoption, reshaping the commercial real‑estate insurance market.

Key Takeaways

• 55% would consider insuring less to lower premiums.
• Over 90% plan to use connected security cameras.
• 85% aim to adopt smart access‑control systems.
• 80% interested in connected fire detection devices.
• Two‑thirds already use smart HVAC for climate risk.

Pulse Analysis

Insurance carriers are grappling with a surge in climate‑related claims that have pushed commercial‑property premiums to historic highs. Nationwide’s latest survey shows owners now view severe weather—hurricanes, floods, and heat waves—as the top operational risk, eclipsing traditional concerns like labor shortages. This heightened risk perception is prompting decision‑makers to explore cost‑cutting measures, including the controversial option of reducing insured values. While only a third report improved affordability over the past year, more than half are actively seeking ways to trim premiums, signaling a market under pressure to innovate.

Technology is emerging as the primary lever for risk reduction. Over 90% of respondents either use or plan to deploy connected security cameras, while 85% are eyeing smart access‑control solutions and 80% are interested in fire‑detection IoT devices. These tools provide real‑time monitoring, early‑warning capabilities, and data that insurers can incorporate into underwriting models. In states prone to hurricanes or convective storms, smart HVAC and climate‑control systems are already commonplace, helping to mitigate heat‑related damages and improve energy efficiency. Insurers are responding with premium discounts for verified installations, creating a feedback loop that accelerates adoption across the sector.

The broader implication is a shift toward data‑centric insurance underwriting. As owners embed sensors and analytics into their properties, insurers gain granular insight into loss‑prevention measures, enabling more nuanced pricing and potentially new product offerings such as usage‑based premiums. Competitive pressure will likely force carriers to expand discount programs and partner with technology providers to stay relevant. For commercial‑real‑estate firms, the strategic takeaway is clear: investing in smart infrastructure not only safeguards assets against climate threats but also serves as a tangible lever to negotiate lower insurance costs in an increasingly volatile market.