Hikes On The Horizon “Interest rates are up, which benefits
insurance companies because they can make more investment money,” says Schofield. “It’s been a lingering hard market. It’ll cycle back to a soft market in time. A lot of the hardening is driven by cat events. Many carriers are global and can be impacted anywhere in the world, and that can affect us here.”
Anderson sees “some investors open-
ing up their pocketbooks a little bit more because I think they see better opportuni- ties in pricing coming about by people getting out of the market because they can’t sustain themselves through the inflation, who can’t sustain through these catastrophic losses.”
“And I think you’ll see a great oppor-
tunity to buy properties and real estate in the coming months,” he says. “I think the one thing that will change is if we are very careful from a national standpoint of how each and every state and the federal government handle the next few months of our debt. I think our debt is going to basically snowball down and hit the local person. We’ve already seen what inflation can do. Guess what debt can do when it’s being called right and left. So, that’s going to be a challenge I think.”
But Anderson thinks in 18 months
“we’ll see some sunlight.” “I believe we’ll start seeing some
changes,” he says. “It always happens in cycles. I think the industrial market’s going to be good. I think the real estate market’s going to stabilize, and I believe we’re going to see our self-storage blos- som because I believe the housing market will start picking up again.”
RV and boat storage—what Anderson
calls “blue waters, a new asset class of its own”—has huge potential for expan- sion in self-storage. There are 25 million RV and boat owners in the U.S., and that number is expected to grow in three to five years to about 35 million. Those people will need to store their RVs and boats.
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“It’s a great opportunity in RV and
boat storage,” says Anderson. “There’s still insurance cost for individual owners and storage protection, which we provide, but a lot of people are looking to the future about how to gain a little foothold. And I know there’s a lot of self- storage facilities that have extra land and others who have land, and there’s people looking for parking places. I’ll put that out there.”
A lot of storage facility owners have
what Anderson calls a self-insured process, in which they set aside a fund and raise their deductible so high that it cuts the cost of their insurance.
“People are doing that with their
homes and their cars and their RVs and boats—with their toys,” says Anderson. “I’m not going to hide behind the fact that I know property and casualty is
also one of the biggest insurance money makers right now in the world. They charge a pretty good premium in order to mitigate against loss. And they base it on the law of large numbers, [which says] we’ve got to charge this premium to make sure we’re not only able to cover our losses, but we have a profit.”
Statistics show that some of the most
exposed areas with the highest cost to insurance companies are on the U.S. coastlines (California, Texas, Florida, New York) … “Some of those areas where hurricanes hit, and storms in the south- east and the central part of the United States like tornadoes,” Anderson says. “And statistically, that’s where everybody wants to live.”
Jerry LaMartina is a freelance reporter and editor based in Shawnee, Kansas.
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MiniStorageMessenger.com • August 2023
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