December 11, 2007

Over the next three years CIRMA will appraise its members’ real property to better understand the insurable value of each structure and its physical characteristics. CIRMA’s board of directors approved the project to protect CIRMA’s ability to provide blanket coverage, a type of coverage that is broader and easier to administer than a “scheduled policy.” Blanket coverage is based on ownership; scheduled coverage only protects the stated value of property listed on the policy schedule. Obtaining accurate and complete valuations will also enable CIRMA to continue without a punitive coinsurance clause, which reduces claims payments on underinsured property.

Because members’ premiums will be more accurately calculated, the appraisal project will ensure fairness and equity across the pool. The project will also generate accurate construction, occupancy, protection, and exposure data, enabling CIRMA to calculate premiums more accurately and fairly and to provide appropriate coverage for members’ unique and historical buildings.

Bruce A.Wollschlager, CIRMA’s chief executive officer noted, “Because all members’ will be part of the program, the program will have no net effect on premium. It will be revenue-neutral.”

An independent third-party assessment will also help CIRMA strengthen its negotiating position with property reinsurers. “Reinsurers shy away from unknowns; having accurate, complete data on our covered properties will allow us to strengthen the relationship, thereby lowering our reinsurance costs,” said Wollschlager. CIRMA selected CBIZ Valuation Group of Atlanta Georgia for the project. It is a leading insurance property appraisal company with employees located in Connecticut. “CBIZ is, by far, the best choice. They are familiar with the nuances of Connecticut property market, building codes, construction techniques, and ordinances. They are in tune with municipal life, and, because they operate locally and will perform the work efficiently, their bid was the most competitive,” said Steve Bixler, vice president for underwriting and project leader.