By: Dianne Crocker, LightBox research director and Alan Agadoni, senior VP, LightBox EDR
The commercial real estate and insurance industries have historically adapted collaboratively in their response to risk. Today, however, the system is under immense strain. For professionals in environmental consulting, this insurance disruption presents an opportunity. At the May 2025 ULI-IBHS Spring Resilience Summit in Denver, industry leaders highlighted growing needs for risk analytics, property resilience, and climate-conscious design—areas where consultants are well positioned to step in. Insurers and investors alike need better risk data, stronger documentation, and resilience strategies. Below we highlight five insurance trends creating new opportunities for consultants.
1. Risk Analytics: A New Frontier for Due Diligence
Both insurers and CRE investors rely on risk analytics, but they use different models and focus areas. Insurers model for catastrophe severity and price volatility using historic loss data, while CRE investors typically emphasize long-term strategic exposure using tools like FEMA flood maps and climate model overlays.
This disconnect creates a space for consultants to bridge the gap. Environmental, construction, and risk specialists can enhance due diligence by collecting data aligned with both investment strategy and underwriting needs. This type of data includes hazard mitigation documentation, construction and occupancy detail, loss control history, and forward-looking resilience planning.
Standardized reporting of potential hazards by environmental professionals, especially if aligned with the new ASTM E3429-24 Standard Guide for Property Resilience Assessments, can help clients not just streamline underwriting, but also potentially result in lower insurance premiums.
2. Building Materials Matter More Than Ever
Building material choices can dramatically affect insurance costs. Insurers are increasingly wary of combustible materials such as wood-frame construction or foam-based insulation, even when these products meet green building standards.
This poses a conundrum for developers striving to balance sustainability goals with property insurability. It also presents an opportunity: consultants and architects can provide pre-development advisory services that evaluate construction options through the lens of resilience and underwriting. Design choices that reduce risk from fire, wind, and flood—such as concrete cores, masonry walls, and hurricane-rated windows—can translate into measurable premium reductions
3. The Weakest Link in a Portfolio
Portfolio-wide insurance pricing is becoming more nuanced. A single high-risk asset like an outdated coastal warehouse can skew the average loss expectations for an entire investment fund.
Consultants with portfolio-level risk assessment capabilities now have an opportunity to flag outlier properties that present higher risk exposure and advise their clients on insuring these properties separately. This type of proactive segmentation can reduce the drag of high-risk properties on blended premiums and strengthen asset strategy for institutional owners
4. Higher Deductibles, More Skin in the Game
With premiums climbing dramatically, many CRE owners are opting for higher deductibles to keep costs manageable. This trend of insurers essentially shifting more risk back onto the insured has driven demand for preventative strategies such as routine site maintenance, roof replacement schedules, fire safety systems, and emergency response planning.
For consultants, this trend opens the door to opportunities to offer new services like conducting field inspections, performing resilience upgrades, and implementing compliance programs. The benefit to clients is that these measures can help justify higher deductibles while reducing the probability of major claims.
5. Document or Pay the Price
Data documentation and transparency are now critical to achieving favorable insurance terms. Brokers and underwriters are increasingly asking for detailed property information far beyond basic construction and occupancy data. According to ULI, brokers and underwriters are increasingly asking for detailed property information far beyond basic construction and occupancy data.CRE firms are beginning to layer in third-party risk evaluations, especially those outlined in the ASTM E3429-24 standard, and using these evaluations not just during an acquisition, but for annual re-underwriting.
This creates a perfect avenue for environmental, engineering, and ESG consultants to expand their offerings. By integrating resilience data collection into the process of completing a Property Condition Assessment (PCA), a Phase I environmental site assessment (ESA), or an ESG audit, firms can offer clients a more holistic due diligence package that can boost competitiveness and potentially reduce insurance costs.
Risk is the New ROI
Investors, lenders, and public institutions alike have shaped a framework where insurance is not just a financial safeguard, but a core input to real estate feasibility. The ability to get property insurance becomes more central to CRE decision-making, it’s also creating a durable demand for consulting services that are rooted in risk, resilience, and regulation.
Architects can help with future-proof design choices. Engineers can design structure hardening upgrades. Environmental consultants can create property inventories, quantify exposure, and track mitigation. Together, these professions are poised to redefine due diligence and move the needle from a transactional exercise into a long-term value strategy.
The path forward is clear: insurance and risk management are no longer auxiliary services. They’re evolving into essential infrastructure for modern real estate investment. For consultants who can adapt and innovate, this evolution presents not a headwind, but a launchpad.
NOTE TO READERS
This blog is an excerpt from the Inside the Industry column authored by Dianne Crocker, LightBox’s research director, and Alan Agadoni, senior VP, LightBox EDR published monthly by the Air & Waste Management Association in its EM magazine. The column covers a mix of timely business, strategic, and technical topics impacting the world of environmental management.
The full article appears in the August 2025 issue of EM Magazine, a copyrighted publication of the Air & Waste Management Association (www.awma.org), and is accessible in its entirety via AWMA’s online, interactive EM flipbook.
