Jack Welch once said that whichever team sees the world more clearly, wins. In today’s rapidly changing environment, our broad, nuanced, and detailed understanding of risk profiles is a key advantage for Alliance.
There are a lot of obvious risks to physical assets like commercial real estate. Storms, earthquakes, fires, and floods top the list.
Each of those disasters can cause a variety of different kinds of damage, which may or may not be covered by a given insurance contract. The devil is in the details, and insurers survive by being very precise about what they’ll cover in exchange for our premiums. That’s why we always read the fine print carefully.
Alliance’s protects our investors’ capital with deep insurance expertise. We’ve seen more than one 100-year and even 500-year floods recurring in the same areas in recent years. The same with wildfires, tornadoes, and other weather events.
A changing risk profile requires an evolved view on assessing risk. Firms that can see reality clearly and insure commensurately will protect, and in some cases enhance, their returns
For example, a disaster that doesn’t damage our real estate but leaves our tenants unable to pay their rent is still a serious risk. But hedge that by requiring tenants to carry coverage for lost business.
Risks never stop evolving. Alliance is always on the lookout for new dangers on the horizon, and incorporate risk assessment as a significant factor in how we evaluate properties and valuations. That awareness helps us deliver great returns for the long term.