A tight property and casualty market makes having accurate insurance values increasingly important to a competitive carrier. Unfortunately, there have been few tools available to assist underwriters in assessing the adequacy of building and content values. Underestimated values can result not only in lower premium income, but can leave insureds under-compensated in the event of a claim.
In order to assess the adequacy of values in Chubb Group's existing commercial property book, the Warren, NJ-based carrier undertook a study relying on Marshall & Swift's (Princeton, NJ) telephone estimating services to determine accurate replacement costs. Scott Spencer, Chubb's vice president of commercial underwriting services, says that "rather than add yet another information collection requirement to our underwriters and producers, we had Marshall & Swift contact our insureds directly."
In the course of the study, Marshall & Swift contacted 250 insureds during the fourth quarter of 2000. Marshall & Swift's surveyors collected comprehensive information about the properties concerned. The data was then processed by Marshall & Swift through its Commercial Estimator and Commercial Contents & Inventory (CCI) software and Valuation Data Warehouse using modeling technology to calculate value.
Chubb has licensed Commercial Estimator for several years, deploying the Microsoft (Redmond, WA) Windows-based software in the field on loss-control representatives' laptops to determine building values. However, the company had no calculation engine to estimate the value of contents. "Previously the only way an insurance company had to assess the overall property values at a commercial insured was to engage in a complete scheduled inventory," says Spencer. "By utilizing this model valuating tool and creating a peer group," he adds, "we're able to say, 'For a business like yours, with sales in this range, and this number of employees, in this region, a value for your personal property should be approximately this.'"
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio