Los Angeles, August 18, 2005 – Undervaluation statistics for the United States homeowners business have continued to improve since 2004 says Marshall & Swift / Boeckh (MS/B). MS/B, the leading worldwide provider of building cost data and estimating technology to the property insurance industry, has been tracking home valuation statistics since the early 1990’s and reports it as the MS/B ITV Quality Index”. In 2005, MS/B’s research shows the percentage of undervalued U.S. homes has dropped over the prior year from 61 percent to 59 percent, and the average percentage of undervaluation has improved from 25 percent to 22 percent across the industry. This is a significant improvement from five years ago when approximately 73 percent of homes in America were undervalued by an average of 27 percent.
According to Bob Dowdell, Chairman of MS/B, this improvement represents a continuation of the insurance industry’s efforts to adopt risk-specific valuation tools and “best practices” strategies to both new and renewal property business. “Analysis of claims results and trends in books of business clearly demonstrate the benefit of risk-specific valuation tools,” says Dowdell. “By eliminating imprecise valuation methodologies, such as the use of indices to determine and update coverage amounts or tools that rely on quality judgments or square-foot-only estimates, carriers improve business when written and maintain it more profitably while improving policyholder protection.”
“The realities of underinsurance manifested by incidents such as the California wildfires of late 2003 have motivated more and more policyholders to become proactive about verifying that their coverage amounts are appropriate,” says Dowdell. He points out that consumer sites, such as MS/B’s http://www.AccuCoverage.com, are available for homeowners to calculate independent home valuations, allowing them to take a proactive role in the insuring process. Using simple Web access, AccuCoverage(TM) enables homeowners to participate in the estimating process so they better understand what coverage is needed and can intelligently review issues with their agents.
Over the last few years the MS/B ITV Quality Index has shown steady improvements in the undervaluation results. The net impact of the improvement in undervaluation has been substantial ever since the conversion from square foot to total component estimating methodologies began. Prior to 2000 when the insurance industry began adopting component estimating, it was estimated that undervaluation could cost the U.S. property industry nearly $8 billion in lost premium revenues. As component estimating proliferated, this number improved drastically. Nearly $4 billion of these lost premiums have been collected as policy coverage has been more properly aligned to better protect each individual home.
About MS/B
Marshall & Swift / Boeckh (MS/B), an MDA company, is the leading supplier of local building cost information, residential and commercial property valuation technology and services for the property and casualty insurance sector in the United States and Canada. MS/B has five offices throughout the U.S. and Canada. For information, please contact Marsha Berenson, Media Coordinator, at 800-285-1288, Ext. 2828, MAILTO:[email protected], or visit MS/B’s Web site at http://www.msbinfo.com.
About MacDonald, Dettwiler and Associates Ltd. (MDA)
MDA provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision making and operational performance in business and government organizations worldwide.
MDA employs more than 2,500 people in locations across the United States, Europe, and Canada. The company trades on the Toronto Stock Exchange under the symbol TSX:MDA.
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