Why Reconstruction Cost Accuracy Matters to Reinsurers

February 27, 2026 / 3 min read

In today’s property insurance market, understanding the true cost to rebuild—not just the market value of a structure—is more critical than ever. With evolving construction costs, volatile supply chains, and increasing frequency of severe loss events, reinsurers face heightened capital demands, complex exposure aggregations, compressed renewal timelines, and greater uncertainty around ultimate loss costs.

Verisk’s 360Value^® delivers scalable, data-driven reconstruction cost insights that help reinsurers validate exposure data, accelerate treaty evaluation workflows, and strengthen portfolio risk assessment supporting downstream modeling, pricing, and capital planning.

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The reconstruction cost challenge for the reinsurance market

Reinsurance exists to help insurers manage risk, smooth income volatility, and absorb losses from large or catastrophic events by assuming portions of underlying exposures. But before catastrophe models are run or treaty pricing decisions are finalized, reinsurers must first evaluate the accuracy and consistency of exposures being ceded.

Reliable estimation of what a full rebuild actually costs—not just an indexed or assumed value—is foundational to reinsurers’ ability to:

Evaluate exposures with precision: Reconstruction cost estimates help validate reported values and improve confidence in expected loss and tail risk assumptions across portfolios spanning geographies and perils, from hurricanes to wildfires to convective storms.
Support treaty evaluation and pricing decisions: Exposure validation helps reinsurers triage submissions efficiently and move portfolios into modeling and pricing workflows with greater confidence in underlying values.
Strengthen capital and portfolio management: More reliable cost inputs improve the exposure foundations feeding catastrophe models and capital-at-risk assessments, helping reinsurers better understand accumulation and deploy capital more effectively.

Unlike traditional replacement cost methods that rely on broad indices or simple percentage adjustments, 360Value provides component-based reconstruction cost estimates that reflect real-world conditions, including building materials, labor, fees, and localized cost drivers.

What makes 360Value a reinsurance-ready solution

Verisk’s 360Value data combines claims-driven insights with construction cost data and scalable delivery capabilities, aligning directly with how reinsurers assess portfolios and treaty submissions.

Grounded in claims and verified cost data: 360Value draws on tens of thousands of actual claims and verified construction cost inputs to generate replacement and reconstruction cost estimates reflecting what it truly costs to rebuild in each location. This helps reinsurers validate ceded exposures and reduce valuation uncertainty entering downstream modeling and pricing processes.
Localized, timely insight: Construction costs vary significantly across regions and over time. 360Value uses continuously refreshed material pricing, labor rates, and permit data to deliver current, localized cost insights that reinsurers can apply consistently across submission triage and portfolio analytics.
Broad property coverage: Whether reviewing standard commercial risks or complex property portfolios, 360Value supports reconstruction cost estimation across a wide range of property types, helping reinsurers evaluate exposures consistently across cedents and geographies.
Consistency across the risk life cycle: From submission review through renewal and ongoing portfolio updates, consistent valuation data helps reinsurers monitor exposure changes over time that may influence treaty performance, accumulation management, and capital stress scenarios.

In a reinsurance climate shaped by inflationary pressures, evolving construction markets, and emerging perils, the old practice of simple indexed replacement costing is no longer sufficient. Reinsurers increasingly need exposure validation that scales with portfolio size while supporting time-sensitive renewal workflows.

360Value equips reinsurers with rigorously developed reconstruction cost insights that help improve exposure confidence, support treaty evaluation, strengthen portfolio analytics, and reinforce overall balance sheet resilience.

By anchoring risk decisions in verified, localized, claims-based cost data rather than broad averages, reinsurers can better navigate uncertainty and protect capital when it matters most.

Learn more about how 360Value can support reinsurance decision-making for both commercial and personal lines.

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Beyond Indexed Costs: Why Reinsurers Turn to 360Value for Current Insights

The reconstruction cost challenge for the reinsurance market

What makes 360Value a reinsurance-ready solution