Loss Cost Quote Reports

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ProMetrix
There’s more to your risk
than meets the eye
Loss Cost Quote Reports
Because all commercial risks
are NOT created equal
When you insure commercial properties, you need accurate
rating and underwriting information that will lead you to profitable results. There’s only one logical place for you to turn to
get that information — Verisk Commercial Property. Our core
expertise is surveying and evaluating commercial properties.
We incorporate the latest industry loss experience to develop
loss costs tailored to the conditions we find. And we know
what to look for when examining a building’s construction,
hazards, public and private fire protection, occupancy, and
other exposures. We consider those and hundreds of other variables to develop prospective specific loss costs for nearly 3.5
million commercial properties in the ProMetrix® commercial
property database.
Specifically rated risks have certain characteristics:
• higher values than class-rated buildings
• unique construction types, ranging from combustible to
fire resistive
• special hazards, such as flammable liquids, spray painting, or
chemicals
• complicated protection features, such as automatic sprinklers
or automatic detection systems
The degree of hazard variability for commercial businesses can
be very high, and you need an equitable way to price your
policies for larger buildings. If you use a class loss cost for
those higher-valued properties without field-verifying the key
rating variables, you risk pricing the policy incorrectly.
The value of loss costs for commercial properties
ISO uses its Specific Commercial Property Evaluation
Schedule (SCOPES) to assure the consistent analysis of hazards
for every property we survey and to develop specific loss costs.
In the states where we provide commercial property rating
services, we’ve filed our insurance rating program and received
approval from state insurance regulators. And most insurers
have adopted that program. SCOPES provides many unique
features:
• a nationally recognized method of evaluating potential losses
through the interaction of key variables, such as construction, hazards, private and public protection, and occupancy
• a sophisticated analysis of the causes of and contributors to
potential property losses
• use of nationally recognized safety standards — such as those
of the National Fire Protection Association (NFPA) — and
product listings of recognized testing organizations such as UL
• the latest industry loss experience
With ISO’s specific loss costs, you can see where SCOPES
deficiency points apply and then encourage the businessowner
to reduce them through hazard mitigation measures. Moreover,
you can improve your bottom line by offering pricing incentives for policyholders to install and maintain protection features, such as automatic fire detection systems, automatic fire
suppression systems, portable fire extinguishers, standpipe systems, and watchman services.
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Make more profitable underwriting decisions
When you use ISO’s loss costs, the premiums you charge will
accurately reflect the wide variations in hazards and conditions
among commercial properties. Your rating process will also
reflect the contributing loss factors for individual buildings,
not just overall loss experience of classes of businesses. Specific
loss costs can help promote underwriting and rating equity in
your business — buildings with higher loss potential have
higher ISO loss costs.
How Verisk’s field representatives can help
Our staff of specially trained field representatives gives you the
information you need to:
• concentrate on administering your underwriting criteria,
since you can rely on Verisk’s experienced staff to verify onsite information
• reduce your time and expense for underwriting and rating
with site-verified information about millions of buildings and
occupants throughout the country
• establish rating charges for deficiencies and credits for protection features
Internet delivery of loss costs through ProMetrix
When you’re ready to calculate the premium for a business or
commercial building, you can obtain a Loss Cost Quote
Report through the ProMetrix system. You can retrieve loss
cost quotes for commercial properties located throughout the
country. Our advanced address search options and comprehensive ProMetrix database can reduce your costs and save you
valuable time. And you get easy-to-read reports that you can
print or download (as XML data sets). You can search for a
match from approximately 3.5 million buildings and 6 million
businesses occupying those buildings. You get the accurate loss
cost information you need to underwrite and price your commercial policies.
A Verisk Loss Cost Quote Report covers all the specifics
Here’s a sample Loss Cost Quote Report for a specifically rated risk in a sprinklered building with one occupant. The construction
class is masonry noncombustible, and the Public Protection Classification (PPCTM) is 4.
ProMetrix
RCP (Rating Plan/
Construction/Protection) code
RCB (Rating Plan/
Construction/BCEGS®) code
Experience Level Adjustment
(ELA)
Protective Safeguard
Clause
Commercial Statistical
Plan (CSP) territory code
Basic Group II (BG II)
symbol
CSP class codes
Basic Group I (BG I) loss costs
Enhanced Wind Basic Group II
(BG II) loss costs
Wind Factor Indicated
Basic Group II (BG II)
loss costs
BCEGS Factor
Wind Factor Applied
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Terms and definitions
Experience Level Adjustment (ELA)
The ELA is based on our annual actuarial reviews of premium and loss data.
This critical information reflects
increasing or decreasing industry loss
experience for each of the major statistical classifications in each state —
giving you the competitive pricing edge
you need to stay profitable. When you
retrieve a Loss Cost Quote Report,
you’ll get the current loss costs first.
But if your company hasn’t adopted the
most recent ELA, you can choose the
appropriate prior one from a dropdown menu. You’ll find up to seven
prior levels, and the system adjusts the
loss cost to reflect the ELA you select.
Also, for each ELA, the Loss Cost
Quote Report provides our filing designation used with state insurance regulators and the circular number that
announced the implementation date.
Limit of insurance (LOI)
LOI curves provide varying loss costs
(per $100 of insured value) as the limit
of insurance changes. LOI rating
reflects the need to vary the rate
depending on the actual limit selected.
Basic Group I (BG I) loss costs
BG I perils include fire, lightning,
explosion, vandalism, and sprinkler
leakage. The report displays loss costs
for the building and its occupants.
Basic Group II (BG II) loss costs
BG II perils include windstorm or hail,
smoke, aircraft or vehicle, riot or civil
commotion, sinkhole collapse, and volcanic action. The report displays the
ISO loss costs for the building and its
occupants, in addition to the BG II
Rating Group symbol.
Protective Safeguard Clause (specific
rated only)
The Protective Safeguard Clause highlights which (if any) protective features
have received credit in the BG I loss
cost and which you should include in
the Protective Safeguard Endorsement.
Protective features include:
• automatic sprinkler system
• automatic fire alarm
• security service
• subscription fire department service
contract
Type of risk code
Basic Group I Nonsprinklered
Schedule (Specifically) Rated
1 – with Basic Group II
Class-Rated
G – with Basic Group II Specific Wind
Rating G
Commercial Statistical Plan (CSP)
codes
The CSP codes help you properly
record the required statistical codes,
including:
• CSP territory code
• BG II CSP code
• RCP (Rating Plan/Construction/
Protection) code
R – The first digit identifies how the
building is rated:
• specifically rated, nonsprinklered
• class-rated
• class-rated, substandard conditions
• specifically rated, sprinklered
C – The second digit is the building’s
CSP construction class:
• frame
• joisted masonry
• noncombustible
• masonry noncombustible
• modified fire resistive
• fire resistive
P – The third and fourth digits show
the building’s PPC code: 1 to 10.
• CSP class codes for the building and
each of the occupants
Basic Group I Class-Rated with
Substandard Condition Charge(s) applicable
3 – with Basic Group II Class-Rated 3
J – with Basic Group II Specific Wind
Rating J
BG II RCB (Rating Plan/BG II
Construction Class/BCEGS® classification)
R – The first digit identifies how the
building is rated
Providing reliable loss cost data for class-rated risks
Many insurers use class (manual) rates when insuring smaller
commercial properties (25,000 square feet or less) without
sprinklers and without manufacturing occupants. However, it’s
not always easy to get reliable information on those properties,
since many have complicated mixtures of construction and
occupancy types. That makes policy rating complicated.
The ProMetrix database gives you immediate access to underwriting and rating information on many of those properties.
You can order a class-rated Loss Cost Quote Report for any of
the buildings in our database eligible for class rating according
to the rules in the ISO Commercial Lines Manual. You’ll get
Basic Group I Class-Rated with no
Substandard Condition Charge(s)
2 – With Basic Group II Class-Rated 2
H – with Basic Group II Specific Wind
Rating H
Basic Group I Sprinklered Schedule
Rated
4 – with Basic Group II Class Rated 4
K – with Basic Group II Specific Wind
Rating K
C – The second and third digits are the
building’s BG II construction:
Fifty possible wind construction codes
and definitions
B – The fourth and fifth digits show the
Building Code Effectiveness Grading
Schedule (BCEGS®) classification for
the community: 01 to 10 and 95 to 99.
BG II Enhanced loss cost (specific
rated only)
Buildings in wind-prone areas are eligible for BG II specific rating if they
exceed a size threshold depending on
the level of wind hazard for that geographic location. We produce specific
loss costs by modifying the underlying
BG II loss costs and using credits and
debits related to the building features,
such as roof and wall envelope, framework, building code, location, and surrounding environment.
Wind factor indicated (specific rated
only)
This is a Verisk-calculated composite
debit/credit factor. We provide the factor, which is an uncapped value, for
information purposes only.
Wind factor applied (specific rated
only)
We calculate the BG II specific loss
cost using this factor. The wind factor
applied is the composite debit/credit
factor calculated by Verisk and currently capped at the latest filed cap
values for the state.
BCEGS factor (specific rated only)
We review a community’s building
code enforcement agency and assign
a BCEGS classification for insurance
underwriting information and rating
purposes. We calculate the BCEGS
factor using the BCEGS grade
assigned to the building relative to the
community grade and year built. We
don’t use the BCEGS factor in any calculations; therefore, the BG II specific
loss cost doesn’t reflect it. We provide
the BCEGS factor for information purposes and optional application.
Class Insight ratio (class-rated only)
For buildings eligible for class rating,
the class-determined loss cost is the
average of all properties that fall within
a range. The Class Insight ratio —
using a range of .50 to 2.0 — is a more
precise evaluation of the class-rated
risk. This analytic tool provides important insight into where the property
falls within this range in comparison to
the class average.
similar information and the same screen functionality used for
specifically rated risks. And you can trust that experienced
Verisk staff members have evaluated the eligibility requirements and verified important rating variables, such as construction, public protection, square footage, occupancy, and
BG II classifications.
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Class Insight
Class Insight is a new capability that enhances the class-rated
loss cost. When you use a class-determined loss cost, it’s the
average of all the properties that fall within a range. The new
Class Insight ratio is a more precise individual risk evaluation
that provides important insight into where the risk falls in
that range. That allows you to underwrite the property as competitively as possible to avoid adverse selection and maximize
profitability.
Estimated Loss Costs and loss cost surveys
You’re likely to find the information you’re looking for in the
database. But if you don’t find a specific building or if the
occupants have changed, you can order a loss cost survey on
the property. We can produce loss costs quickly and easily —
usually within 30 calendar days. In the meantime, you can call
us for an estimate of the loss cost or calculate one yourself
using our exclusive Estimated Loss Cost feature.
ProMetrix
RCP (Rating Plan/
Construction/Protection) code
RCB (Rating Plan/
Construction/BCEGS) Code
Wind Factor Indicated
Experience Level Adjustment
(ELA)
Enhanced Wind Basic Group II
(BG II) loss costs
Basic Group I (BG I) loss costs
545 Washington Boulevard • Jersey City, NJ 07310-1686 • www.verisk.com/cp
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For more information about Verisk’s Loss Cost Quote Reports
Call Verisk Customer Support at 1-855-859-8775 or send e-mail to [email protected]. Or contact your Verisk representative.
For information on all Verisk products, visit us at www.verisk.com.