Insurance Valuation Services

Transcription

1 Insurance Valuation Services

2 There is never a problem until there is a problem. It has been estimated that 75% of all commercial enterprises are underinsured by amounts approaching 40% of the insurable value of each building and its contents. Following the devastation caused by recent natural disasters, the U.S. Department of Commerce issued a report stating that insurance settlements would amount to many billions of dollars. More startling was the report s observation that total uninsured property losses would exceed the quantum of the insurance settlements.

3 - Insurance Valuation Services More or Less? Today, there is much to consider when re-negotiating property insurance: Merger and acquisition activity has picked up with improved economic conditions, creating challenges for risk managers in tracking insurable values at new acquired facilities. Construction costs have shown dramatic changes, both positive and negative, during the past five to ten years, making it increasingly difficult to determine accurate insurable values. Currency fluctuations are creating new replacement cost realities for imported machinery and equipment. Underwriters remain steadfast regarding their need for precise and detailed values, which is making it an arduous task to obtain coverage. Increased losses from natural disasters around the globe have stabilized property insurance rates; soon, property rates could increase for the first time in several years. The foregoing is now bearing considerable weight on how the current insurable value of property is derived. Too often, insureds prepare their statement of values by simply inflating last year s assumptions. Unfortunately, the resultant figures are often inaccurate, leading to payment of unwarranted excess premiums and/or insufficient coverage. is here for you. Other valuation firms may claim to understand property insurance. We ve actually lived it. Many of our insurance valuation professionals have previously worked with insurance underwriting companies. Who better to understand your need for accurate, timely insurance valuations? 3

4 Who we serve brings more than 100 years of experience providing insurance valuation services. Our professionals have completed tens of thousands of engagements to determine the insurable values of all types of buildings, equipment and contents; it is tempting to say that we have seen it all. The reality is that our insurance valuation experience is as broad as it is deep. Today, we provide insurance valuation services on a global basis for virtually every public and private market sector. With insurable values in excess of $80 billion, our subscribers insurable property is constantly changing. We rely on [] to monitor property changes, create and maintain our subscribers Statements of Value. For more than 25 years, their annual reports have provided accurate insurable values that help maintain credibility with our insurers and simplifies our renewals. Understanding what is important to us, [] always delivers on time and within budget. They are our trusted advisor. Keith Shakespeare Chief Operating Officer and Attorney-in-Fact Canadian Universities Reciprocal Insurance Exchange

5 - Insurance Valuation Services We have been engaged to handle some of the largest and most challenging valuations of the past decade, including the inspection and/or valuation of the following: 86 electric power-generating facilities in 20 countries around the world Historic properties as diverse as Churchill Downs, the Alamo, the Shedd Aquarium and many state capitol buildings in the US 500 buildings for an Ivy League university, some dating back as far as the early 1700s 200 assisted living centers in the US, Canada, UK and Germany Inspected and appraised 4,400 buildings in 15 months throughout North America on behalf of a Lloyd s syndicate 50+ North American universities that are members of a reciprocal insurance exchange Over 5,500 churches in Episcopal and Catholic dioceses in the past five years Major sporting complexes including Lambeau Field, Minute Maid Park, Rogers Centre, Tiger Stadium, Arrowhead Park and Kauffman Stadium, American Airlines Center and the Miami Dolphins Stadium More than 30 oil refineries and petrochemical plants in the former Soviet Union and Eastern Europe Some of the world s largest aluminum, nickel and copper production facilities 15 steel mills with total capacity of 70 million tons of annual steel production Major hotel and casino properties in Las Vegas and the Far East Turnpike commission properties including offices; interchanges; and maintenance, service and radio sites totaling more than 1,000 buildings/ structures Each year we appraise more than 30,000 buildings in the United States. 5

6 - Insurance Valuation Services What we do Are you confident that your statement of values accurately reports all of your insurable property? Do you know where your property s reported insurable values come from? Have you kept pace with the change in assets within your facilities? How well was your statement of values received when last marketed? Is underwriting your property coverage a challenge? If any of these questions gave you pause, it is time to talk to us. is the leading provider of property insurance appraisal services. Our professionals have served many of the world s largest corporations and all levels of government. Major insurance companies and brokers recognize the quality of our analyses and thoroughness of our reports, and recommend our firm as a preferred provider of property insurance appraisal solutions. Broadly speaking, we provide the following insurance valuation services for buildings, equipment and other contents: Calculation of insurable values to support placement of replacement cost and/or actual cash value coverages Primary and secondary Construction, Occupancy, Protection and Exposure (COPE) data analysis Post-loss services Building Appraisals Full-scope, component-based services utilizes a full-scope, component-based methodology for insurance valuations. This approach is significantly more comprehensive than a square footage and occupancy (use) method. Our services provide a meticulous inspection of each building, including a tape-andmeasure tour of the premises, and identification and recording of various construction components and major service systems. 6

7 - Insurance Valuation Services COPE data collection services There is a growing interest among underwriters for COPE data. To accommodate this need, compiles and reports primary COPE data as a standard deliverable. We can also provide GPS coordinates, report flood zone data and collect specified secondary windstorm and earthquake data for each property in order to further assist the location analysis, which is becoming an increasingly important component of the underwriting process. Primary COPE Data Property description Address Class of construction Year of construction Square feet of space Number of stories Average story height Wall construction Roof construction Heating system Cooling system Fire alarm Sprinklers Entry alarm GPS coordinates Optional Secondary Windstorm COPE Data Building construction quality Roof age Roof anchor Basement flood protection Cladding type Frame-foundation connection Opening protection Content damage-proneness grade Roof covering Roof geometry Roof equipment hurricane bracing Appurtenant structures Roof sheathing attachment Ground-level equipment protection Flash and coping quality Flood zone indication Limited-scope services We can also provide limited-scope services such as modeling of personal property and trend analysis. Periodic updating of previously appraised facilities This is offered for facilities that has previously valued, and typically can be completed annually for a period of five to seven years between new site inspections. Equipment Appraisals Our comprehensive equipment valuation includes the physical inventory and valuation of all movable equipment. The level of detail will vary according to the client s specific requirements, and can range from a single value for all equipment in a building to a detailed listing of all assets in excess of the client s capitalization threshold. Individual equipment detail can include: Location Asset number Model number Description Manufacturer Serial number Alternately, the insurable value of equipment and/or building contents for certain occupancies can be estimated on the basis of building size and occupancy. This approach relies upon our proprietary databases and models - information consolidated from decades of completing detailed insurance valuation assignments. A hybrid approach may also be used, which includes the physical inventory and valuation of major equipment (with a unit cost in excess of a minimum threshold) and the modeling of minor assets (with a unit cost below the threshold). 7

8 - Insurance Valuation Services Why? If you re contemplating the engagement of a valuation firm, ask yourself: Which one brings the most experience to the table? Who employs professionals who have actually worked in the insurance industry? Which firm utilizes the most comprehensive appraisal approach and methodology? When you examine the realities, we think you will find there is only one answer.... We never have any problems with your service, reports or personnel. We always find your employees professional and timely. We have been ordering appraisals from your company for at least 10 years and have no problems. That is why we continue our relationship with your company. Thank you for your good service and quality of appraisals. Underwriting Manager Alabama Municipal Insurance Corporation 8

9 - Insurance Valuation Services We are the premier global valuation and corporate finance advisor. More than 2,000 employees serving a diverse range of clients in more than 70 offices globally Performed over 10,000 engagements in 2015 for more than 5,000 clients Client roster includes over 40% of the S&P 500 and nearly 60% of the Fortune 100 We know insurance valuation. We have walked in your shoes. A number of our professionals spent years working for FM Global, a major property insurer of highly protected risks. Our global insurance valuation team comprises more than 100 seasoned professionals who annually value insurable property aggregating hundreds of billions of dollars. We have handled some of the largest and most extraordinary valuations of the past decade for a wide range of clients in various industries, including industrial facilities of the world s leading multinational companies, entire states/provinces, historic landmarks, cathedrals, universities and power generation facilities. We have the ability to assist clients through all phrases of insurance, from pre- to post-loss services. In the event of a catastrophic loss, can assist with the damage quantification. We are experts. Breadth and depth of expertise eliminates the need to rely on subcontractors. Our professionals have the experience necessary to value virtually any tangible business asset. Professional participation includes AGRiP s Quality Education Initiative committee member and URMIA communications committee chair Unrivaled interaction with the American Society of Appraisers (ASA), a key valuation standard setting agency Frequently presenting on valuation issues to national and regional insurance conferences including RIMS, PRIMA, URMIA and ASHRM Recognized by leading brokers and underwriters Credentials include Certified Public Accountant; Chartered Financial Analyst; Accredited Senior Appraiser (American Society of Appraisers); Member, Royal Institution of Chartered Surveyors; MAI (Appraisal Institute) We are focused on client needs. We aren t merely involved in valuation; we are unequivocally committed to meeting client needs. On every engagement, direct client access to the firm s senior management is always the norm, never an exception. 9

10 Our Experience Over the past decade alone, our professionals have performed hundreds of insurance valuation projects across all market segments. Our representative list of insurance clients includes: AES Global Insurance Company Alliance of Schools for Cooperative Insurance Program California Joint Powers Risk Management Campbell Soup Company Canadian Universities Reciprocal Insurance Exchange Cargill, Incorporated City of Atlanta The Coca-Cola Company Cooper Tire Dean Foods Dynegy Inc. Ecclesiastical Province of Miami Exelon Fairmont Hotels & Resorts Florida Independent Colleges & Universities FM Global 10

11 - Insurance Valuation Services Four Seasons Hotels GlaxoSmithKline Harvard University Johnson Controls Joy Global Kraft Foods Group Lockheed Martin Space Systems Company Mars, Inc. Memorial Hermann Healthcare System MGM Resorts International Miami Dade Aviation Department Nestlé New Mexico Public Schools Insurance Authority New York University Medical Center Northrop Grumman Corp. Peerless Insurance Pennsylvania School Board Association Pennsylvania Turnpike Commission PepsiAmericas, Inc. Pirelli RJ Kiln & Co. Rolls-Royce North America, Inc. Saudi Basic Industries Corporation (SABIC) SKF USA, Inc. South Carolina Municipal Insurance and Risk Financing Fund Starwood Hotels & Resorts Worldwide State of New Mexico State of Vermont Sunrise Senior Living, Inc. Texas Association of Public Schools Texas Association of School Boards The Tribune Company Unilever N.V. West Virginia Board of Risk and Insurance Management Wm. Wrigley Jr. Company 11

12 For more information please visit: About is the premier global valuation and corporate finance advisor with expertise in complex valuation, dispute and legal management consulting, M&A, restructuring, and compliance and regulatory consulting. The firm s more than 2,000 employees serve a diverse range of clients from offices around the world. M&A advisory and capital raising services in the United States are provided by Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Securities Ltd., which is authorized and regulated by the Financial Conduct Authority. Copyright 2016 LLC. All rights reserved.

13 Insurance Valuation Services provides property insurance appraisal solutions to many of the world s largest insureds. There is never a problem, until there is a problem. What s the cost of not knowing? Are you confident that your statement of values accurately reports all of your insurable property? Do you know where your property s reported insurable values come from? Have you kept pace with the changes in assets within your facilities? How well was your statement of values received when last marketed? Is underwriting your property coverage a challenge? If any of these questions gave you pause, it is time to talk to us. is the leading provider of property insurance inspection and appraisal services. Our professionals have served many of the world s largest corporations and all levels of government. Major insurance companies and brokers recognize the quality of our analyses and thoroughness of our reports, and recommend our firm as a preferred provider of property insurance appraisal solutions. Each year we value insurable property aggregating hundreds of billions of dollars for our clients, from school and government buildings to extraordinary properties such as sports stadiums, cathedrals, universities, steel mills, and power generation and semiconductor fabrication facilities. Our services Duff & Phleps provides insurance valuation services globally for virtually every public and private market sector. Our services for buildings, equipment and other contents include: y Calculation of insurable values to support replacement cost and/or actual cash value coverages y Primary and secondary construction, occupancy, protection and exposure (COPE) data analysis y Annual update for building and personal property values, as well as accounting for capital acquisitions and retirements y Secure erisk web-based reporting system allowing detailed viewing, sorting and filtering of insurance appraisal data y Post-loss services With insurable values in excess of $80 billion, our subscribers insurable property is constantly changing. We rely on to monitor property changes, create and maintain our subscribers Statements of Value. For more than 25 years, their annual reports have provided accurate insurable values that help maintain credibility with our insurers and simplifies our renewals. Understanding what is important to us, always delivers on time and within budget. They are our trusted advisor. Keith Shakespeare, Chief Operating Officer and Attorney-in-Fact Canadian Universities Reciprocal Insurance Exchange

14 - Insurance Valuation Services Our team global insurance valuation team comprises more than 100 seasoned professionals. Our professionals value insurable property aggregating hundreds of billions of dollars and inspect and appraise more than 30,000 buildings annually. Our team brings deep industry experience, with some of our professionals having worked for FM Global, a major property insurer of highly protected risks, for years. We have established best practices and are familiar with the economic cycles of the insurance industry, as well as all the industries we serve. We are an independent provider. Our insurance valuation team is free from conflicts of interest and focuses on property insurance appraisal and risk management solutions. Our professionals provide objective opinions of insurable value. Our credentials Our professionals have the experience necessary to value all classifications of tangible assets. y Professional chairmanships include AGRiP s Quality Education Initiative committee member and URMIA communications committee y Unrivaled interaction with the American Society of Appraisers (ASA), a key valuation standard setting agency y Frequently presenting on valuation issues at national and regional insurance conferences including RIMS, PRIMA, URMIA and ASHRM y Credentials include Certified Public Accountant; Chartered Financial Analyst; Accredited Senior Appraiser (American Society of Appraisers); Member, Royal Institution of Chartered Surveyors; MAI (Appraisal Institute) We are focused on client needs. We are not merely involved in valuation; we are unequivocally committed to meeting client needs. On every engagement, direct client access to the firm s senior management is always the norm, never an exception. For more information please visit: About is the premier global valuation and corporate finance advisor with expertise in complex valuation, dispute and legal management consulting, M&A, restructuring, and compliance and regulatory consulting. The firm s more than 2,000 employees serve a diverse range of clients from offices around the world. For more information, visit com. Contact: Paul Hartnett Global Leader, Fixed Asset Management and Insurance Solutions T E paul.hartnett@duffandphelps.com M&A advisory and capital raising services in the United States are provided by Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Securities Ltd., which is authorized and regulated by the Financial Conduct Authority. Copyright 2016 LLC. All rights reserved. DP160025

15 Construction, Occupancy, Protection and Exposure (COPE) Data Services This article was authored by Nigel P. Wilson, ASA, CEng, MIMMM Director, Insurance Services We have seen increased underwriter demand for accurate data, both in terms of values and physical properties of risks. In catastrophe-prone areas of the country, this data is being used in sophisticated modeling software to predict the impact of different catastrophe scenarios. However advanced the catastrophe modeling software, the results are reliant on the veracity of the input data. In response to this demand, has experienced a significant increase in clients requesting COPE data elements when conducting insurance valuations of buildings and their contents. We started to provide primary COPE data collection services 15 years ago; more recently, we also have been providing secondary windstorm data elements for certain clients. In some instances, we conduct non-value inspections purely to collect primary and secondary COPE data for our clients. Primary COPE data elements included as standard service in our inspection and appraisal reports are: y Property description y Address y Class of construction y Year of construction y Square feet of space y Number of stories y Average story height y Wall construction y Roof construction y Heating system y Cooling system y Fire alarm y Sprinklers y Entry alarm y GPS coordinates Optional secondary windstorm COPE data elements include: y Building construction quality y Roof age y Roof anchor y Basement flood protection y Cladding type y Frame-foundation connection y Opening protection y Content damage-proneness grade y Roof covering y Roof geometry y Roof equipment hurricane bracing y Appurtenant structures y Roof sheathing attachment y Ground-level equipment protection y Flashing and coping quality y Flood zone indication Updated Models Drive Increased Demand In February 2011, catastrophe modeling firm RMS released an update, commonly known as RMS v11.0, to its hurricane risk model. The updated model was based in part on: y Three years of research and development y A research project with the University of Miami on how hurricanes weaken after landfall y Tens of thousands of wind-speed observations 10 times more than those available for the last update y $18 billion of actual claims data from 12 major windstorms over the last 20 years

16 - Construction, Occupancy, Protection and Exposure (COPE) Data Services y Updated storm surge modeling y Losses from Hurricane Ike that identified quality of construction and building vulnerability issues y Regional building codes and compliance issues RMS subsequently validated its model using: y Its largest database of historical wind observations y Claims data from clients and industry levels ($200 billion over 30 years) y Testing and adoption by clients In addition, the model was passed by the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) after rigorous review by a panel of experts. Major changes in RMS v11.0 included projecting a much less drastic falloff in wind speeds for storms once they head inland, as well as heightened building vulnerability and increased losses due to storm surge. These and other key changes represented a major change in catastrophic risk exposure for both insurers and insureds. It was thought that the largest impact was felt by non-coastal wind risk. Effects on insurance companies included the need to purchase more reinsurance, having to reallocate capital, reduced capacity and increased pressure on pricing. The subsequent release of RMS v13, featuring updates to the storm surge model and slight decreases to the long-term and midterm rates for storm activity, did not have the gamechanging impact of v11. Summary When property portfolios lack data, risk models will default to a worst-case scenario. Property portfolios with superior valuation and COPE data and documentation also receive preferential underwriting attention. Now is the time to research missing data elements. Contact to see how we can assist in maintaining accurate, reliable data for your property portfolio. For more information please visit: About is the premier global valuation and corporate finance advisor with expertise in complex valuation, dispute and legal management consulting, M&A, restructuring, and compliance and regulatory consulting. The firm s more than 2,000 employees serve a diverse range of clients from offices around the world. For more information, visit Contact Nigel P Wilson, ASA, CEng, MIMMM Director, Insurance Services, nigel.wilson@duffandphelps.com M&A advisory and capital raising services in the United States are provided by Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Securities Ltd., which is authorized and regulated by the Financial Conduct Authority. Copyright 2016 LLC. All rights reserved. DP16XXXX DP160020

17 erisk Web-Based Reporting Access, manage and share your property insurance appraisal data anytime and anywhere with erisk, secure web-based reporting system. erisk can assist with: Organizing data for insurance renewal procedures Sharing data with insurance brokers, underwriters and others within your organization Facilitating risk analysis and streamlining the claims process erisk lets our clients focus on more than 40 different risk management parameters with our custom report writing features. With the erisk Web-based reporting system, you can: Filter your property information by up to five different levels Select and print reports with a simple click of a button Access street or satellite views through Google Maps Visit the FEMA flood mapping center and selected weather websites for updates on hazardous weather conditions View detailed inspection and appraisal reports, building photographs, contents and land improvements reports Export appraisal data to an Excel file for internal use or as a simple PDF Filter data elements and selection criteria of an exact result or range, and then print data to a PDF or export it into Excel Use our batch import functionality to add your vehicle/mobile equipment information, as well as data for other insured property Add images and files to your imported data View graphs and charts identifying select COPE and TIV data A system administrator assigned to your account will set up varying levels of secure access at your direction to all data or just selected information. We are focused on client needs. We are not merely involved in valuation; we are unequivocally committed to meeting client needs. On every engagement, direct client access to the our senior management is always the norm, never an exception. We serve some of the world s largest and most specialized insurance brokers, underwriters and risk managers. Each year we inspect and appraise more than 30,000 buildings. Our insuranceindustry clients rely on us to provide accurate, supportable valuation reports.

18 erisk Web-Based Reporting erisk Features View details of each building (above) by simply clicking on a building in the Building Name column or the actual photo For more information please visit: About is the premier global valuation and corporate finance advisor with expertise in complex valuation, dispute and legal management consulting, M&A, restructuring, and compliance and regulatory consulting. The firm s more than 2,000 employees serve a diverse range of clients from offices around the world. For more information, visit M&A advisory and capital raising services in the United States are provided by Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Securities Ltd., which is authorized and regulated by the Financial Conduct Authority. Copyright 2016 LLC. All rights reserved. DP160022