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Verisk Adds Hazard Scoring to Commercial Property Surveys

Staff Writer | August 10, 2015

Verisk Insurance Solutions announces that the Relative Hazard Percentile is now provided on all field surveys performed by the company. By comparing a commercial property with millions of peer properties, the proprietary risk analytic helps insurers identify the need for loss control measures and make better informed risk-acceptance decisions that conform to their underwriting guidelines.

Verisk's more than 550 field analysts perform over 350,000 on-site commercial property underwriting surveys each year. The survey provided to the client now includes the Relative Hazard Percentile (RHP). The RHP uses an objective engineering formula to evaluate a building's construction, occupancy, fire protection, and exposures. Those property features and conditions are then scored relative to state and national averages for similar buildings in Verisk's ProMetrix database of more than 3.7 million commercial properties and 6 million businesses.

"The property condition and associated risks are obviously important, but knowing how that property's risk characteristics compare with those of its peers provides a powerful insight," says Peter de Freitas, assistant vice president for ProMetrix, Verisk Insurance Solutions. "Verisk's Relative Hazard Percentile stratifies properties and gives our customers an objective risk score for individual risk selection and loss control prioritization."

Relative Hazard Percentile is based on a 1-to-100 scale, providing insurers with a relative ranking among similar properties. A higher score indicates the building has fewer deficiencies and is quantitatively ranked better than other properties with the same occupancy, size, and level of fire protection.

The property characteristics that factor into the Relative Hazard Percentile include the construction class, which relates to the materials used to build the property and the percentage of the structure that consists of each kind of material; the occupancy, which is indicative of the flammable contents and exposure; public and private fire protection capabilities, such as a functioning automatic sprinkler system; and exposures presented by nearby properties and local risk of wildfire, flood, and seismic activity, among others.

"This additional insight allows underwriters to quickly identify which properties have higher or lower risk," said de Freitas. "And that helps them make more informed underwriting, tiering, and coverage selection decisions."

The Relative Hazard Percentile is included on all commercial property field surveys and in both the short and long versions of the Building Underwriting Report, which is available through the ProMetrix platform. 

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