The news from the high street is grim.

Every day new ranks are added to the growing list of businesses shedding staff as the coronavirus pandemic lockdown takes its toll on the economy and shopping habits, in particular.

Likewise, commercial office property largely remains empty as employees continue to work from home. 

As the public health crisis recedes - for now - the economic impact of Covid-19 is still to play out, and those insuring and distributing commercial property are in the thick of it.

We could see some considerable shifts in the property owners market over the coming months and perhaps even years ahead as commercial property portfolios are diversified and long-term shifts in how properties are used unfolds.

Some of the issues they will be dealing with include change of use, with businesses having to adapt their premises and the consequent change in risk profile, as well as risk to properties that have been left empty, either because staff are working from home, or a business is no longer trading.

A large-scale, long-term pull out of major retailers from town and city centres - such as Birmingham - will lead property owners to seek new sources of rental income.

One obvious means of doing this is converting commercial property into residential flats, a trend that was already prevalent before the pandemic, but could now be accelerated, especially if supported by the government’s simplification of the planning rules.

Brokers will need to respond to these trends and talk to their property owner clients about whether their insurance will correspond to the new risk profiles of their premises.

In regard to newly empty buildings, brokers will need to advise clients on whether policy wordings hold up in face of the changed risk.

Brokers’ commercial property clients are likely to see rental income decline in the coming months as the economic downturn plays out, but the flip side is that low lending rates could encourage more borrowing from landlords seeking to capitalise on the cheaper finance.

Every crisis has a silver lining, and it will be those brokers and insurers who adapt best to meet their client’s needs who will ultimately survive and thrive in the post-Covid-19 world.

Ultimately this is a fast-moving situation and working with businesses who understand and can respond to such changes is going to be even more critical for brokers to consider when electing to place business on behalf of their client’s property needs.

Back to office transitions bring new risks and lessons to the insurance industry