Demand is expected to continue rising as more firms in the Apartment Rental industry require tenants to hold renters insurance
Los Angeles, California (PRWEB) November 02, 2011
In the five years to 2016, IBISWorld, the nation’s largest publisher of industry research, forecasts that revenue for the Renters Insurance industry will increase to $550.2 million. Revenue is expected to continue increasing as more firms in the Apartment Rental industry require tenants to hold renters insurance to mitigate the risk of litigation.
In the five years to 2011, revenue from the Renters Insurance industry has grown 3.8% annually to $515.6 million. During that time, the industry has benefited from several trends. The recession forced many people out of their homes into cheaper dwellings. In many cases, these individuals moved into apartments. Furthermore, households that were previously considering buying homes are now waiting for the market to bottom out, while some would-be homebuyers can no longer get mortgages.
These trends have caused a shift in the demographics of the typical renter. Renters are more likely to be working professionals or middle-aged consumers than they were in the past. This shift has posed an opportunity for the industry because the demographics are more likely to invest in insurance than a typical budget-conscious renter. The Renters Insurance industry has also benefited from an increase in the number of apartment rental companies that require renters insurance. According to the National Multi Housing Council, about 66.0% of the apartment rental companies surveyed required renters to hold renters insurance in 2010, up from 24.0% in 2008.
Furthermore, some insurance companies have created partnerships with apartment rental companies. These developments have also contributed to industry growth during the past five years. In 2011, IBISWorld expects these trends will continue to influence industry growth. As a result, revenue is expected to increase 6.1% during the year. While rising demand has boosted profit margins, industry profit still fluctuates annually depending on natural disasters, which are covered by some renters insurance.
According to IBISWorld analyst, Kevin Culbert, in the five years to 2016,Renters Insurance industry revenue is forecast to increase 1.3% annually to $550.2 million. “Demand is expected to continue rising as more firms in the Apartment Rental industry require tenants to hold renters insurance,” says Culbert. “An increasing number of operators are expected to form marketing agreements with apartment rental companies to bolster industry growth.” Industry revenue is also expected to increase as a result of the projected decline in rental vacancy rates. The rental vacancy rate is anticipated to continue declining, from 10.1% in 2012 to 9.0% in 2016.
For more information, download the full report from IBISWorld on the Renters Insurance industry
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