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Major catastrophe only thing capable of hardening commercial property market

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What would it take to turn the current buyer-friendly commercial property market?

According to market observers, any single event would have to cause more insured damage than any other event previously recorded.

“You're going to have to have a single event of more than $50 billion to move the needle — and no one wants to see that,” said Alexandra Glickman, area vice chairman of Arthur J. Gallagher Risk Management Services Inc. in Glendale, California.

David Finnis, national property practice leader with Willis North America Inc. in Atlanta, noted that as early as the September 2013 Rendez-Vous de Septembre reinsurance meeting in Monte Carlo, Monaco, reinsurance executives thought a $50 billion event would be required to change things. “We've never had a $50 billion event — it's never happened,” he said.

Rick Miller, the Boston-based national property practice leader for Aon P.L.C.'s Aon Risk Solutions, thought that even a $50 billion insured loss might not be a large enough single event to change the situation.

“We had Superstorm Sandy, which was a significant event, but for the industry it could be a $100 billion type of event,” he said. “That said, the industry has a lot of surplus right now,” said Mr. Miller. “Events seem now to be short-term corrections.”

By way of comparison, the costliest insured man-made disaster was the Sept. 11, 2001, terrorist attack on New York, which caused more than $25 billion in insured damage.