JERSEY CITY, N.J., July 22, 2013 — Reflecting the increase in wind damage to property, ISO, a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK), has created a program to survey and rate individual commercial properties for their wind resistance and threat of wind damage.
Under the Enhanced Wind Rating Program, ISO conducts on-site surveys of commercial buildings for approximately 40 characteristics and geographic and environmental factors that may improve — or worsen — a building’s wind resistance or damageability. With that information, commercial property carriers can more accurately establish pricing, measure and mitigate their exposure to wind, and alert property owners to potential hazards.
ISO’s analysis determined that 36 states were most at risk for wind damage. Thirty-four states have implemented the new tool — including Texas and, the latest, Florida, which have the highest number of eligible risks in the program. Only New York and Georgia, both of which are eligible due to coastal areas vulnerable to hurricanes, have yet to approve the program.
Damage from wind has grown rapidly as a percentage of overall property losses in the United States. Eighteen of the top 20 catastrophic events, as identified by ISO’s Property Claim Services® (PCS®) unit, involved wind: 14 hurricanes and 4 tornadoes. Of those 18 wind events, 16 occurred in this century. Although on-site building surveys for fire have become routine in commercial property insurance, the significant increase in losses due to wind events has created a huge demand among carriers for additional information on the abilities of individual buildings to resist wind damage.
“Every hurricane season, we see videos of signage or roof flashing being torn off buildings and hurled against other properties or onto cars. I think smart carriers know that it’s best to prevent damage, rather than pay out a claim afterward — or at least know what kind of risk they’re taking on,” said Bill Raichle, president of Verisk Insurance Solutions – Commercial Property. “We’re pleased that — just as we enter hurricane season — the program is now available to carriers in areas that represent 90 percent of the at-risk population.”
The program uses information from four Verisk sources to provide a comprehensive rating program for wind: the Verisk Insurance Solutions ProMetrix® database, its Building Code Effectiveness Grading Schedule (BCEGS®), AIR Worldwide’s hurricane and severe thunderstorm models, and ISO’s extensive insurance premium and loss statistical database.
“Insured wind loss is clearly increasing, and we developed the program to help quantify a building’s resistance and exposure to wind damage. This allows carriers to rate properties more precisely and mitigate risks,” said Kevin Thompson, president of ISO Insurance Programs and Analytic Services. “Property owners get a lot of information through the media about hurricane preparations. We think of the Enhanced Wind Rating Program as preparation for the insurance industry. By focusing on specific characteristics that correlate directly to damageability — items such as roof geometry, environmental hazards, and geography — carriers are in a better position to price the risk commensurate with the exposure.”
A field staff of more than 450 ISO employees collects information related to building conditions and wind exposure. They identify vulnerabilities such as poorly maintained or deteriorating roofing, improperly fastened mechanical equipment on roofs, and signs and other building fixtures that could become projectiles in high wind. Verisk adds that information to its ProMetrix database of more than 3.5 million U.S. commercial buildings for use in comparative analyses, such as the Enhanced Wind Rating Program, studies, reports, and other services for carriers, property owners, and commercial lenders.
For more information on the Enhanced Wind Rating Program, please visit www.verisk.com/windrating.
Since 1971, ISO has been a leading source of information about property/casualty insurance risk. For a broad spectrum of commercial and personal lines of insurance, the company provides statistical, actuarial, underwriting, and claims information; policy language; information about specific locations; fraud identification tools; and technical services. ISO serves insurers, reinsurers, agents and brokers, insurance regulators, risk managers, and other participants in the property/casualty insurance marketplace. ISO is a member of the Verisk Insurance Solutions group at Verisk Analytics (Nasdaq:VRSK). For more information, visit www.verisk.com/iso and www.verisk.com.