0. CRL UNDERWRITING MANAGEMENT MEETING Property Considerations
NOVEMBER 16, 2011
Greg Mann
Managing Director, Marsh USA
Lindsay Grimes
Assistant Vice President, Marsh USA Atlanta, GA

1. Property Schedules Demographic Information
Basic description of the location of the property
Unique Location Identifiers
Location Number
Location Name
Full Address
Street Number
Street Name
City
County
State
Zip Code
Country
Geographic Location
Longitude
Latitude
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2. Property Schedules Values
Detailed breakdown of values by asset class
Building
Contents (Personal Property)
Equipment
Vehicles
Business Income
Additional asset classes added based on exposure
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3. Property Schedules Primary Characteristics
Basic COPE (Construction, Occupancy, Protection, Exposure) information regarding the risk of the property
Occupancy Code
Construction Class
Construction Description
Year Built
Square Footage
Number of Stories
Basement
Number of Buildings
Flood Zone
Sprinkler Type
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4. Property Schedules Secondary Characteristics
Detailed COPE (Construction, Occupancy, Protection, Exposure) information regarding the risk of the property
Building Foundation
Construction Quality
Roof Framing
Shape of Roof
Type of Roof Covering
Year Roof Covering last Replaced
Building Maintenance
Exterior Cladding
EIFS
Wind Pool Eligibility
Distance to Saltwater
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5. Property Schedules RMS Modeling
RMS 11.0 Edition
Released February 28, 2011
Most carriers have now implemented
Major Changes
Tenfold increase in damage estimates caused by wind
Inland Filling Model revisions - higher wind speeds extending further from the coast
Increased building vulnerability based on detailed analysis of historical claims data
More emphasis on construction quality, building codes and code enforcement
Research on the durability of roof systems and resulting roof performance
Separate storm surge modeling that simulates surge and wave activity as it relates to storm size, intensity, and speed, as well as geographic features of exposed areas
Typical range of change in results is between plus 20 percent to plus 100 percent for wind
New model assumes worst case for missing information
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6. Builder’s Risk Advantages versus Disadvantages
Advantages of adding builder’s risk project to primary property policy
All property exposure under one policy
Control terms and cost (remove contractor’s overhead and profit)
Build in coverage for existing structure for renovations or additions
Disadvantages of adding builder’s risk project to primary property policy
Shared limits
Greater risk of third party controlling operations (contractors are difficult to control/monitor)
Potential limited coverage for soft costs and delay in start-up
Potential for coverage gap based on annual policy term rather than construction period term
Potential higher deductibles
Non-expert underwriters may improperly rate the exposure (difficult to underwrite)
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7. Historical Valuation
Many appraisals now provide historical replacement cost figures
Current historical property valuation wording
On historical property, valuation will be based upon the following requirements:
The Named Insured shall provide written notice to the Company , which specifically identifies where the property is located, when it was built, it’s total square footage with an attached appraisal based upon reproduction value that was conducted within the past five (5) years.
At the time of loss, the basis of valuation for historical property, when the Named Insured has not complied, will be replacement cost as defined in K. below. Where the Named Insured has complied with the requirements, the basis of valuation will be Reproduction Cost, if not replaced, at actual cash value. “Reproduction Cost” is defined as the cost to repair, rebuild or replace with material of like, kind and quality compatible to those originally used, including the cost of skilled labor and/or authentic materials necessary to restore the Property as nearly as possible to its original condition.
Additional products available for historical properties and fine arts
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