Insurance

American Appraisal’s first engagement in 1896 was an insurance appraisal of the Joseph Schlitz Brewing Company. Since then, we have been the leading provider of valuation services for insurance purposes.

Who We Serve
In addition to providing our valuation services to insured property owners, our clients in the insurance industry also include:

• Brokers
• Underwriters
• Governmental and other public-sector risk pools
• Church and other nonprofit insurance organizations
• Risk managers
• Insurance consultants and advisors

What We Do
We provide expertise in all classifications of real and personal property insurance valuation, including the following:

We assist our insurance industry clients with the following insurance valuation and consulting services:

• Real property
  • Buildings
  • Historic properties
  • Utilities
  • Site improvements and property in the open
• Personal property
  • All occupancies of machinery and equipment valuation, from schools to steel mills and semiconductors
  • Equipment inventory and bar code tagging
• Annual updating services
• Supplemental loss control data
  • Primary and secondary COPE data collection
• Customized reporting
  • Web-based reporting solutions
  • GPS coordinates
  • Digital photographs
• Post-loss valuations

Recent Experience
American Appraisal’s recent experience includes:

• Property insurance appraisals of more than 4,400 buildings throughout North America for a Lloyd's of London syndicate
• Preferred provider of property insurance appraisals for one of the largest property insurance underwriters in the United States
• 86 power-generating facilities in 20 different countries
• Historic properties including Churchill Downs, Union Station (Washington DC) and many state capitol buildings

Industry Outlook
The following information on the insurance industry is extracted from an Insurance Services Office press release dated June 22, 2011:

Property/Casualty Insurers’ Profits And Profitability Fell In First Quarter 2011 As Net Losses On Underwriting Ballooned

Private U.S. property/casualty insurers’ net income after taxes dropped to $7.8 billion in first-quarter 2011 from $8.9 billion in first-quarter 2010, with insurers’ annualized rate of return on average policyholders’ surplus — a key measure of overall profitability — decreasing to 5.6 percent from 6.8 percent.

Reflecting insurers’ $7.8 billion in net income after taxes, policyholders’ surplus — insurers’ net worth measured according to Statutory Accounting Principles — rose $7.8 billion, or 1.4 percent, to a record $564.7 billion at March 31, 2011, from $556.9 billion at December 31, 2010.

Driving the declines in insurers’ net income and overall rate of return, net losses on underwriting grew to $4.5 billion in first-quarter 2011 from $1.8 billion in first-quarter 2010. The combined ratio — a key measure of losses and other underwriting expenses per dollar of premium — deteriorated to 103.3 percent in first-quarter 2011 from 101.1 percent in first-quarter 2010, according to ISO and the Property Casualty Insurers Association of America (PCI).

Partially offsetting the deterioration in underwriting results, net investment gains — the sum of net investment income and realized capital gains (or losses) on investments — grew $1 billion to $13.5 billion in first-quarter 2011 from $12.6 billion in first-quarter 2010. In addition, miscellaneous other income rose $0.1 billion to $0.5 billion in the first quarter of 2011 from $0.4 billion in the first quarter of 2010, and insurers’ federal and foreign income taxes dropped $0.5 billion to $1.8 billion from $2.3 billion.

The figures are consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96 percent of all business written by private U.S. property/casualty insurers. . . .

“With mounting net losses on underwriting driving the decline in insurers’ net income and overall profitability in first-quarter 2011, there’s no denying that insurers continued to face substantial headwinds in their core business — underwriting. While there were some positive developments that bode well, there have also been some negative developments that suggest insurers’ results will get worse,” said Michael R. Murray, ISO’s assistant vice president for financial analysis.

http://www.iso.com/Press-Releases/2011/Property-Casualty-Insurers-Profits-And-Profitability-Fell-In-First-Quarter-2011.html

With repeated false starts in the return of a hard market over the past few years, we may have now entered the transition phase, especially considering the cumulative effect of the past 18 months’ natural disasters.  Planning ahead for such a market is paramount to lessening its impact on risk premiums, and supportable property values will make your risk portfolio a more attractive underwriting prospect.

Why American Appraisal?
American Appraisal serves some of the world’s largest and most specialized insurance brokers, underwriters and risk managers. Our insurance industry clients rely on American Appraisal to provide accurate, supportable valuation reports.