Property Risk Dashboard
Understanding and managing your risk quality is critical to a successful property loss prevention program. Whether purchasing property insurance or allocating capital for risk mitigation efforts, knowing your risk and the data shaping it is of prime importance.
Marsh Risk Consulting (MRC) has developed a new diagnostic tool that gathers and evaluates critical components of your property loss control program, thereby enabling you to minimize the subjectivity of market perceptions and strengthen your program with thorough and objective information.
The benefits of utilizing this tool include:
- A convenient and comprehensive dashboard of your property risk profile showing maximum foreseeable loss (MFL) exposures, including business interruption.
- Largest value outstanding recommendations along with anticipated loss expectancies and historical trending of values.
- A visual depiction of your risk quality including fire protection, “open” recommendations, and natural hazard exposures to wind, earthquake, and flood.
- A standardized and systematic analysis tool depicting key property underwriting criteria for interpretation and risk management strategies.
Many factors comprise and differentiate a firm’s risk quality. Industry sector, perception of risk factors, and supporting data are cumulative to how your program may be perceived by the property underwriting community.
The dashboard provides a profile of your property risks along with MRC’s indicators, which can assist you in the qualification and quantification of data necessary to delineate your risk quality from an industry peer. This robust presentation of data provides substantiated, objective criteria and documentation to the underwriting community upon which more accurate and strategic decisions can be made.
Who It's For
- Organizations seeking a standardized and systematic review of their property loss control programs.
- Organizations developing and preparing their property risk transfer renewal strategies.
- Organizations seeking an economical approach to evaluate their property risk control mitigation processes.
- Organizations seeking to maximize their property risk transfer programs while reducing costs.
What You Get
- Validation of your risk quality from a property underwriting perspective.
- Analysis of key indicators that impact upon your risk transfer and risk mitigation strategies.
- A repeatable process that identifies continuous risk improvement opportunities.
- Identification of property risk issues critical to your organization’s business resiliency efforts.
- Marsh Risk Consulting expertise in property risk issues and drivers as well as analytics and measurement.
Data Quality: Saving Your Money
It is a well-known fact that the quality of your property loss control data is a critical component of successful risk management and risk transfer programs. Accurate and substantiated loss expectancies, along with adequately protected physical assets, define an organization’s highly protected risk (HPR) status. Failure to do so can severely impact risk transfer costs and more importantly jeopardizes a firm’s business viability in the event of an unforeseen property loss.
The property risk dashboard can assist in the identification of areas of strengths or weakness in your loss control data fields.
Risk Quality: Where to Invest
A successful property risk management program is contingent upon a sustainable continuous risk improvement process. In a challenging business climate, capital investments require an informed decision making process. Recommendations having incorrect or inflated loss expectancies may lead to incorrect risk remediation decisions that will adversely impact both risk transfer costs and business resiliency endeavors.
Accurate loss expectancies in the form of maximum foreseeable losses (MFLs) and individual property loss protection deficiencies can allow an organization to prioritize and invest appropriately in its risk mitigation programs. Failure to do so may result in inappropriate capital investments that neither improves upon an organization’s risk quality nor its business continuity outcomes.
The property risk dashboard allows you to view your “Top 10”MFL’s, including top business interruption values, alongside recommended remediation actions. This list of your largest loss expectancies enables you to interpret and determine appropriate strategies for reducing loss exposure by facility and/or individual recommendation.
Exposure Identification Quality: Natural Hazards
Recent natural hazard events have grabbed headlines on a global basis. Earthquakes, flooding events, and wind exposure factors have severely impacted the profitability and underwriting considerations of property insurers. Much emphasis is now placed upon good data quality as it regards earthquake, wind, and flood exposures. Failure to do so can have a negative impact upon property risk transfer programs in the form of cost and/or coverage outcomes.
Qualifying and quantifying exposures is equally important to a well-managed property risk program. Risk mitigation and/ or contingency planning are predicated on identification and quantification of the risk exposure. Without it, strategies and decision outcomes cannot be properly managed.
Through the use of Munich Re’s NATHAN (Natural Hazards Assessment Network), the dashboard provides an overview of the potential natural hazard risks to your geographical locations from flood, earthquake, and wind exposure.
Property Risk Dashboard – Case Study
Marsh Risk Consulting’s Property Risk Consulting Practice generated a property risk dashboard for a client in the steel industry in advance of renewal discussions with its primary property market underwriters. Loss control engineering services are provided to this client by the property insurer which participates at a risk transfer level above that of the primary level.
Review of the site loss expectancies and a subsequent review of the one- and two-year loss trending revealed that although business interruption values decreases were noted due to the depressed business climate, property damage values actually increased several-fold beyond inflationary construction values. For example, one particular loss expectancy had a property damage outcome (no business interruption potential) increase of more than 50 percent ($37,000,000) from the previous year’s loss calculation!
As a result, discussions with the insurer’s engineering contact resulted in a complete review of the top loss expectancies. It also helped establish procedures acceptable to both parties that require a more detailed summary of the property damage and business interruption reviewed with plant management prior to publication.