The document discusses challenges related to business interruption insurance valuation. Key challenges include setting an appropriate indemnity period, as this determines how long insurance will cover lost income. For manufacturing businesses, indemnity periods are often longer than 12 months due to factors like rebuilding time. The period must consider impacts to all aspects of the business, including relationships with suppliers and time to regain customers. Determining gross profits, a common basis for insurance coverage, also poses challenges in capturing a business's specific circumstances.
Pricing , lisencing and portfolios in tech transferRakshaSharma26
This document discusses various topics related to intellectual property valuation and licensing. It begins by defining pricing of IP assets and factors that influence pricing determinations. It then discusses different types of intellectual property and methods used to value IP, including cost-based methods, market-based methods, income-based methods, and qualitative methods. The document also provides examples and case studies of different valuation methods. Finally, it covers intellectual property licensing, including reasons for licensing, types of licensing agreements, and general principles for licensing agreements.
The document discusses concepts related to the deterioration of asset values. It defines key terms like impairment loss, recoverable amount, fair value, and value in use. It explains how to estimate the value in use of an asset by projecting future cash flows. It also discusses how impairment losses occur when the recoverable amount of an asset is less than its carrying amount. The document then summarizes how impairment is assessed for inventories and other asset types. It provides examples of impairment calculations and discloses the accounting entries. Finally, it distinguishes between depreciation, amortization, and impairment.
The document outlines an upcoming webinar on land valuation presented by Dr. Julian Roche. It provides an agenda for the webinar including a welcome, housekeeping notes, the start of the session, a Q&A period, and the end of the webinar. It also gives details on how participants can access recordings and slides after the webinar. The speaker's background is provided, noting his experience in real estate development, consultancy, and publishing books on real estate topics. The webinar will discuss traditional and deal-based approaches to land valuation, challenges in valuing land when transaction data is limited, and examples of land price indices used to extrapolate values.
The seminar on 'Asset Valuation - A Key Element in Business Valuation' was organized by the Institution of Engineers (India) Maharashtra State Centre in Mumbai. Over 55 participants from fields like engineering, finance, real estate, and valuation attended. Several guest speakers presented on various aspects of asset valuation, including business valuation, real estate valuation, and the importance of valuation skills. The seminar provided participants international-standard education on valuation concepts, approaches, and case studies. It aimed to enhance participants' valuation expertise and skills.
The Role of Fixed Asset Appraisals in Healthcare Valuations PYA, P.C.
PYA Principal Darcy Devine and Consulting Manager Emma Miller presented “The Role of Fixed Asset Appraisals in the Valuation of Healthcare Entities” during NACVA Webinar Week. They provided an overview of fixed asset appraisals including how they are performed, the definitions of value, and why they are necessary when conducting a business valuation of a healthcare entity. Their presentation also demonstrated how the resulting value from a fixed asset appraisal can vary significantly from simply using depreciated values.
This document presents a land valuation technique using GIS. The authors analyzed various land valuation factors spatially using ArcGIS to produce a land valuation map. They determined weights for factors like road access, location, utilities and produced a map showing land parcels graded by value range. The technique helps estimate land values mathematically but has limitations like not considering all legal/personal factors. It was concluded that a GIS-based nominal asset approach can effectively value land by formulating and examining spatial factors.
1. The gross and net book values of fixed assets at the beginning and end of the period, along with additions, disposals, and other movements.
2. The depreciation methods and rates used for each class of fixed asset.
3. The amount of borrowing costs capitalized during the period for qualifying assets.
4. Any changes to accounting estimates like useful lives or residual values that affect the calculation of depreciation.
Pricing , lisencing and portfolios in tech transferRakshaSharma26
This document discusses various topics related to intellectual property valuation and licensing. It begins by defining pricing of IP assets and factors that influence pricing determinations. It then discusses different types of intellectual property and methods used to value IP, including cost-based methods, market-based methods, income-based methods, and qualitative methods. The document also provides examples and case studies of different valuation methods. Finally, it covers intellectual property licensing, including reasons for licensing, types of licensing agreements, and general principles for licensing agreements.
The document discusses concepts related to the deterioration of asset values. It defines key terms like impairment loss, recoverable amount, fair value, and value in use. It explains how to estimate the value in use of an asset by projecting future cash flows. It also discusses how impairment losses occur when the recoverable amount of an asset is less than its carrying amount. The document then summarizes how impairment is assessed for inventories and other asset types. It provides examples of impairment calculations and discloses the accounting entries. Finally, it distinguishes between depreciation, amortization, and impairment.
The document outlines an upcoming webinar on land valuation presented by Dr. Julian Roche. It provides an agenda for the webinar including a welcome, housekeeping notes, the start of the session, a Q&A period, and the end of the webinar. It also gives details on how participants can access recordings and slides after the webinar. The speaker's background is provided, noting his experience in real estate development, consultancy, and publishing books on real estate topics. The webinar will discuss traditional and deal-based approaches to land valuation, challenges in valuing land when transaction data is limited, and examples of land price indices used to extrapolate values.
The seminar on 'Asset Valuation - A Key Element in Business Valuation' was organized by the Institution of Engineers (India) Maharashtra State Centre in Mumbai. Over 55 participants from fields like engineering, finance, real estate, and valuation attended. Several guest speakers presented on various aspects of asset valuation, including business valuation, real estate valuation, and the importance of valuation skills. The seminar provided participants international-standard education on valuation concepts, approaches, and case studies. It aimed to enhance participants' valuation expertise and skills.
The Role of Fixed Asset Appraisals in Healthcare Valuations PYA, P.C.
PYA Principal Darcy Devine and Consulting Manager Emma Miller presented “The Role of Fixed Asset Appraisals in the Valuation of Healthcare Entities” during NACVA Webinar Week. They provided an overview of fixed asset appraisals including how they are performed, the definitions of value, and why they are necessary when conducting a business valuation of a healthcare entity. Their presentation also demonstrated how the resulting value from a fixed asset appraisal can vary significantly from simply using depreciated values.
This document presents a land valuation technique using GIS. The authors analyzed various land valuation factors spatially using ArcGIS to produce a land valuation map. They determined weights for factors like road access, location, utilities and produced a map showing land parcels graded by value range. The technique helps estimate land values mathematically but has limitations like not considering all legal/personal factors. It was concluded that a GIS-based nominal asset approach can effectively value land by formulating and examining spatial factors.
1. The gross and net book values of fixed assets at the beginning and end of the period, along with additions, disposals, and other movements.
2. The depreciation methods and rates used for each class of fixed asset.
3. The amount of borrowing costs capitalized during the period for qualifying assets.
4. Any changes to accounting estimates like useful lives or residual values that affect the calculation of depreciation.
The document provides an overview of Oshkosh Corporation's presentation at Baird's 2016 Industrial Conference on November 9, 2016. It discusses Oshkosh's key messages, financial performance in FY16, strategy to evolve and deliver more value through growth, innovation, cost optimization, and international expansion. It also summarizes the company's business segments, including targets for margins and growth drivers. The document contains forward-looking statements and non-GAAP financial measures.
Uct investor presentation october 2016Ultracleanir
The document provides an investor presentation for a company in the semiconductor capital equipment industry. Some key points:
- Revenue in Q3 2016 was $146M, up 12.6% from the previous quarter, with GAAP EPS of $0.08 and non-GAAP EPS of $0.17.
- Spending on semiconductor wafer equipment is expected to continue recovering as chipmakers invest in new nodes.
- The company provides design, engineering, manufacturing and turnkey solutions across the semiconductor manufacturing process.
- It aims to outperform industry growth through strategic investments and delivering value to customers.
CB&I is a leading provider of technology and infrastructure for the energy industry with a $2.9 billion market cap and $20 billion backlog. It has over 40,000 employees worldwide and 125 years of experience in reliable solutions. The presentation discusses CB&I's competitive advantages including its experience and global reach, vertically integrated supply chain, diversification across energy infrastructure, and 70% fixed-price backlog. CB&I's strategy is focused on driving revenue and earnings growth through operational performance and capital allocation to deliver improved valuation.
CB&I is a leading provider of technology and infrastructure for the energy industry with a $2.9 billion market cap and $20 billion backlog. It has over 40,000 employees worldwide and 125 years of experience in reliable solutions. The presentation discusses CB&I's competitive advantages including its experience and global reach, vertically integrated supply chain, diversification across energy infrastructure, and 70% fixed-price backlog. CB&I's strategy is focused on driving revenue and earnings growth through operational performance and capital allocation to deliver improved valuation.
The document provides an overview of a presentation by Oshkosh Corporation at the 2016 Southwest IDEAS Investor Conference on November 17, 2016. It includes forward-looking statements and discusses Oshkosh's key messages, profile, FY16 performance, strategy called "MOVE" to evolve and deliver more value through focusing on customers, optimizing costs, leading in innovation, and driving international growth. It also summarizes the company's business segments and their outlook, and covers Oshkosh's capital allocation strategy and FY17 estimates.
This presentation outlines the methodology for developing a new petrochemicals project from planning through execution. It discusses conducting early feasibility studies to evaluate opportunities and select the most viable option. The project definition phase involves comprehensive front-end engineering studies including a pre-feasibility study and detailed feasibility study to analyze the market, costs, financials and mitigate risks. Upon completing these studies, the execution phase involves forming implementation agreements, carrying out engineering, procurement and construction (EPC) and commissioning the facilities for start-up.
The document discusses The Manitowoc Company's presentation at the RBC Capital Markets' Global Industrials Conference in Las Vegas on September 7, 2016. It begins with a safe harbor statement noting any forward-looking statements are subject to risks and uncertainties. The presentation agenda then covers building a real company through transforming Manitowoc, executing the transformation plan, and future growth opportunities. The document provides details on Manitowoc's initiatives around margin expansion, growth, innovation, and velocity to drive results as part of its transformation into a higher-quality, higher-margin crane company.
Masco - Investor Presentation - September 2014Masco_Investors
Masco Corporation announced plans to unlock shareholder value through 1) spinning off its installation and other services businesses to form a new publicly-traded company, 2) reducing corporate expenses, and 3) implementing a share repurchase program of up to $1.2 billion. The spin-off would create two focused companies, with Masco concentrating on branded building products and the new company focusing on installation and distribution services. These initiatives aim to drive improved performance and unlock value for shareholders.
This document provides an investor presentation for a company in August 2016. It begins with safe harbor statements noting that some statements in the presentation are forward-looking and subject to risks and uncertainties. It then discusses non-GAAP financial measures used by management to evaluate performance. The presentation provides an overview of the company as a global leader in designing, engineering and manufacturing critical modules for the semiconductor capital equipment industry. It highlights the company's capabilities, customers, markets served and financial performance.
The document provides an overview of Advanced Emissions Solutions, Inc., which focuses on clean coal technology and specialty chemicals. It summarizes the company's refined coal business, including its ownership in Clean Coal Solutions and Clean Coal Solutions Services. The refined coal facilities produce cleaner burning coal through proprietary additives and generate tax credits for investors through 2021. The facilities also provide emissions reductions for utility partners. Advanced Emissions expects to continue leasing or selling refined coal facilities and receiving rental income through 2021.
This document provides an overview and financial projections for Synacor, a digital media company. It summarizes Synacor's strategy to drive growth across its portal, advertising, email, video, and cloud identity businesses. The company aims to transform its business and achieve $300 million in revenue and $30 million in EBITDA by 2019 through organic growth and winning new customers. It provides financial data and adjustments to reconcile GAAP measures and outlines its strategy across business segments and growth opportunities.
Delta provides a high-level summary of its performance as a high quality company. It consistently produces solid financial results, with record profits, returns, and balance sheet strength. This allows Delta to increase capital returns to shareholders. Delta also has momentum continuing into 2016, with modest capacity growth, a fuel tailwind, and success from commercial and cost initiatives providing solid earnings. Delta is building a more durable business model to produce strong profits and cash flows throughout the business cycle.
World Finance Review Sep_2014 KazakhstanRobert Jutson
This document discusses tools for evaluating capital investment projects. It outlines essential traits for successful projects, including proven resources, creditworthy offtakers, reliable contractors, and efficient plants. It also provides an overview of qualitative and quantitative ways to assess macro risks, such as currency and regulations, and project-specific risks like resource availability and construction delays. Examples are given of how these tools were applied to rank competing solar and cement projects. Applying such systematic evaluation methods can help management improve investment decisions under uncertain market conditions.
This document provides an overview and discussion of Advanced Emissions Solutions' 2015 financial results and strategic priorities. Key points include: revenues increased due to completing emissions control equipment contracts; earnings from the refined coal segment were lower due to capital expenditures to expand operations; and a strategic review is underway to explore options for the emissions control segment while aggressively executing on cost containment initiatives. The company aims to substantially reduce costs while building momentum in attracting new tax equity investors for refined coal facilities.
This document provides an overview and discussion of Advanced Emissions Solutions' 2015 financial results and strategic priorities. Key points include: revenues increased due to completing emissions control equipment contracts; earnings from the refined coal segment were lower due to capital expenditures to expand operations; and a strategic review is underway to explore options for the emissions control segment while aggressively executing on cost containment initiatives. The company aims to substantially progress in attracting new tax equity investors for refined coal facilities by the end of 2016.
The document provides an overview of The Manitowoc Company's presentation at the Seaport Global Industrials & Coatings Conference in Chicago on September 1, 2016. It discusses Manitowoc's transformation into a standalone crane company through margin expansion, growth initiatives, innovation, and increasing velocity. Key points include plans to relocate crawler crane production, improve quality and market share, leverage new technologies, and focus on operational strategies to drive improved financial results and position the company for future growth opportunities.
Sentient Science provides asset management solutions for operators and computational testing services for suppliers in key industries such as wind energy, aerospace, and rail. They offer a digital platform called DigitalClone that connects operators and suppliers to take asset actions that lower energy costs. At WindEurope 2017, Sentient Science is showcasing their DigitalClone Live product, new digital bearing models, and business value assessments showing cost reductions for operators. They also discuss how digitalization can help both operators and suppliers meet business goals such as optimizing operations and supply chain management.
Mercer Capital's Value Focus: Auto Dealer Industry | Year-End 2017Mercer Capital
Mercer Capital is a large valuation and financial advisory firm that publishes an annual newsletter on the auto dealer industry. The newsletter provides statistics on the industry and discusses the unique factors involved in valuing auto dealerships. Valuing auto dealerships requires special knowledge of the industry terms, financial statements, and hybrid valuation methods that combine asset-based and market approaches using blue sky multiples. The newsletter reviews trends in the industry, the unique financial statements and valuation approaches for auto dealerships, and common adjustments made in the valuation process.
This document provides an investor overview from Curtiss-Wright for the second quarter of 2017. It includes information on Curtiss-Wright's financial goals and strategic focus on margin improvement through initiatives like operational excellence and supply chain management. Curtiss-Wright expects 3-5% organic sales growth, over 14% operating margin, and free cash flow conversion over 125% on average. It also summarizes Curtiss-Wright's end market diversification and 2017 financial guidance.
More Related Content
Similar to Insurance Appraisal GCC Presentation Autumn 16
The document provides an overview of Oshkosh Corporation's presentation at Baird's 2016 Industrial Conference on November 9, 2016. It discusses Oshkosh's key messages, financial performance in FY16, strategy to evolve and deliver more value through growth, innovation, cost optimization, and international expansion. It also summarizes the company's business segments, including targets for margins and growth drivers. The document contains forward-looking statements and non-GAAP financial measures.
Uct investor presentation october 2016Ultracleanir
The document provides an investor presentation for a company in the semiconductor capital equipment industry. Some key points:
- Revenue in Q3 2016 was $146M, up 12.6% from the previous quarter, with GAAP EPS of $0.08 and non-GAAP EPS of $0.17.
- Spending on semiconductor wafer equipment is expected to continue recovering as chipmakers invest in new nodes.
- The company provides design, engineering, manufacturing and turnkey solutions across the semiconductor manufacturing process.
- It aims to outperform industry growth through strategic investments and delivering value to customers.
CB&I is a leading provider of technology and infrastructure for the energy industry with a $2.9 billion market cap and $20 billion backlog. It has over 40,000 employees worldwide and 125 years of experience in reliable solutions. The presentation discusses CB&I's competitive advantages including its experience and global reach, vertically integrated supply chain, diversification across energy infrastructure, and 70% fixed-price backlog. CB&I's strategy is focused on driving revenue and earnings growth through operational performance and capital allocation to deliver improved valuation.
CB&I is a leading provider of technology and infrastructure for the energy industry with a $2.9 billion market cap and $20 billion backlog. It has over 40,000 employees worldwide and 125 years of experience in reliable solutions. The presentation discusses CB&I's competitive advantages including its experience and global reach, vertically integrated supply chain, diversification across energy infrastructure, and 70% fixed-price backlog. CB&I's strategy is focused on driving revenue and earnings growth through operational performance and capital allocation to deliver improved valuation.
The document provides an overview of a presentation by Oshkosh Corporation at the 2016 Southwest IDEAS Investor Conference on November 17, 2016. It includes forward-looking statements and discusses Oshkosh's key messages, profile, FY16 performance, strategy called "MOVE" to evolve and deliver more value through focusing on customers, optimizing costs, leading in innovation, and driving international growth. It also summarizes the company's business segments and their outlook, and covers Oshkosh's capital allocation strategy and FY17 estimates.
This presentation outlines the methodology for developing a new petrochemicals project from planning through execution. It discusses conducting early feasibility studies to evaluate opportunities and select the most viable option. The project definition phase involves comprehensive front-end engineering studies including a pre-feasibility study and detailed feasibility study to analyze the market, costs, financials and mitigate risks. Upon completing these studies, the execution phase involves forming implementation agreements, carrying out engineering, procurement and construction (EPC) and commissioning the facilities for start-up.
The document discusses The Manitowoc Company's presentation at the RBC Capital Markets' Global Industrials Conference in Las Vegas on September 7, 2016. It begins with a safe harbor statement noting any forward-looking statements are subject to risks and uncertainties. The presentation agenda then covers building a real company through transforming Manitowoc, executing the transformation plan, and future growth opportunities. The document provides details on Manitowoc's initiatives around margin expansion, growth, innovation, and velocity to drive results as part of its transformation into a higher-quality, higher-margin crane company.
Masco - Investor Presentation - September 2014Masco_Investors
Masco Corporation announced plans to unlock shareholder value through 1) spinning off its installation and other services businesses to form a new publicly-traded company, 2) reducing corporate expenses, and 3) implementing a share repurchase program of up to $1.2 billion. The spin-off would create two focused companies, with Masco concentrating on branded building products and the new company focusing on installation and distribution services. These initiatives aim to drive improved performance and unlock value for shareholders.
This document provides an investor presentation for a company in August 2016. It begins with safe harbor statements noting that some statements in the presentation are forward-looking and subject to risks and uncertainties. It then discusses non-GAAP financial measures used by management to evaluate performance. The presentation provides an overview of the company as a global leader in designing, engineering and manufacturing critical modules for the semiconductor capital equipment industry. It highlights the company's capabilities, customers, markets served and financial performance.
The document provides an overview of Advanced Emissions Solutions, Inc., which focuses on clean coal technology and specialty chemicals. It summarizes the company's refined coal business, including its ownership in Clean Coal Solutions and Clean Coal Solutions Services. The refined coal facilities produce cleaner burning coal through proprietary additives and generate tax credits for investors through 2021. The facilities also provide emissions reductions for utility partners. Advanced Emissions expects to continue leasing or selling refined coal facilities and receiving rental income through 2021.
This document provides an overview and financial projections for Synacor, a digital media company. It summarizes Synacor's strategy to drive growth across its portal, advertising, email, video, and cloud identity businesses. The company aims to transform its business and achieve $300 million in revenue and $30 million in EBITDA by 2019 through organic growth and winning new customers. It provides financial data and adjustments to reconcile GAAP measures and outlines its strategy across business segments and growth opportunities.
Delta provides a high-level summary of its performance as a high quality company. It consistently produces solid financial results, with record profits, returns, and balance sheet strength. This allows Delta to increase capital returns to shareholders. Delta also has momentum continuing into 2016, with modest capacity growth, a fuel tailwind, and success from commercial and cost initiatives providing solid earnings. Delta is building a more durable business model to produce strong profits and cash flows throughout the business cycle.
World Finance Review Sep_2014 KazakhstanRobert Jutson
This document discusses tools for evaluating capital investment projects. It outlines essential traits for successful projects, including proven resources, creditworthy offtakers, reliable contractors, and efficient plants. It also provides an overview of qualitative and quantitative ways to assess macro risks, such as currency and regulations, and project-specific risks like resource availability and construction delays. Examples are given of how these tools were applied to rank competing solar and cement projects. Applying such systematic evaluation methods can help management improve investment decisions under uncertain market conditions.
This document provides an overview and discussion of Advanced Emissions Solutions' 2015 financial results and strategic priorities. Key points include: revenues increased due to completing emissions control equipment contracts; earnings from the refined coal segment were lower due to capital expenditures to expand operations; and a strategic review is underway to explore options for the emissions control segment while aggressively executing on cost containment initiatives. The company aims to substantially reduce costs while building momentum in attracting new tax equity investors for refined coal facilities.
This document provides an overview and discussion of Advanced Emissions Solutions' 2015 financial results and strategic priorities. Key points include: revenues increased due to completing emissions control equipment contracts; earnings from the refined coal segment were lower due to capital expenditures to expand operations; and a strategic review is underway to explore options for the emissions control segment while aggressively executing on cost containment initiatives. The company aims to substantially progress in attracting new tax equity investors for refined coal facilities by the end of 2016.
The document provides an overview of The Manitowoc Company's presentation at the Seaport Global Industrials & Coatings Conference in Chicago on September 1, 2016. It discusses Manitowoc's transformation into a standalone crane company through margin expansion, growth initiatives, innovation, and increasing velocity. Key points include plans to relocate crawler crane production, improve quality and market share, leverage new technologies, and focus on operational strategies to drive improved financial results and position the company for future growth opportunities.
Sentient Science provides asset management solutions for operators and computational testing services for suppliers in key industries such as wind energy, aerospace, and rail. They offer a digital platform called DigitalClone that connects operators and suppliers to take asset actions that lower energy costs. At WindEurope 2017, Sentient Science is showcasing their DigitalClone Live product, new digital bearing models, and business value assessments showing cost reductions for operators. They also discuss how digitalization can help both operators and suppliers meet business goals such as optimizing operations and supply chain management.
Mercer Capital's Value Focus: Auto Dealer Industry | Year-End 2017Mercer Capital
Mercer Capital is a large valuation and financial advisory firm that publishes an annual newsletter on the auto dealer industry. The newsletter provides statistics on the industry and discusses the unique factors involved in valuing auto dealerships. Valuing auto dealerships requires special knowledge of the industry terms, financial statements, and hybrid valuation methods that combine asset-based and market approaches using blue sky multiples. The newsletter reviews trends in the industry, the unique financial statements and valuation approaches for auto dealerships, and common adjustments made in the valuation process.
This document provides an investor overview from Curtiss-Wright for the second quarter of 2017. It includes information on Curtiss-Wright's financial goals and strategic focus on margin improvement through initiatives like operational excellence and supply chain management. Curtiss-Wright expects 3-5% organic sales growth, over 14% operating margin, and free cash flow conversion over 125% on average. It also summarizes Curtiss-Wright's end market diversification and 2017 financial guidance.
Similar to Insurance Appraisal GCC Presentation Autumn 16 (20)
1. Significance of Proper Asset Valuation in today’s
International/GCC Insurance Markets
Tony J Prior MIRM MInstPet
InfraConsult ARAS Limited
Presentation Autumn 2016
GCC Presentation Autumn 2016
2. Overview
Introduction to InfraConsult ARAS Limited 3
Challenges for the Insurance Market 8
Construction and Equipment Cost Trends 17
Valuation Solutions Property and Material Damage 21
Business Interruption Cover and Gross Profit Definition 29
Business Interruption Challenges 38
Engaging a Valuation Consultant 46
Contact Information 49
2GCC Presentation Autumn 2016
3. An Introduction to InfraConsult ARAS Limited
3GCC Presentation Autumn 2016
4. A truly professional service
Our aim is to be competitive, without sacrificing a truly Professional service.
We offer Appraisal & Valuation Services for Insurance Replacement and Asset Management.
Our staff are based in the UK, Europe and Asia, but we work worldwide.
The Team we have in place are all Senior Appraisers, with experience of a wide range of
industries and international assignments, including Oil, gas and petrochemicals.
We pick the Appraiser(s) with most appropriate experience for each assignment, ensuring
speedy and accurate completion, of both Site Surveys and Report Preparation.
in view of the experience, expertise and professionalism of our Consultants, we are able to
quote competitive fees, as assignments are completed swiftly and to a defined timescale.
We are an independent LLC, Registered in the UK
4GCC Presentation Autumn 2016
5. Experience
Automotive
Banking and Financial Services
Pharmaceutical
Food Industry
Health Care
Restaurants, Leisure, Hotels, etc.
Renewables
5
Oil & Gas & Petrochemicals
Mining and Minerals
Power, Water, Gas, District
Cooling, etc.
Retail and Malls
Iron, Steel, Aluminum, etc.
Telecommunications
Rail, Transportation, etc.
GCC Presentation Autumn 2016
6. The Challenges for the Global and GCC Insurance
Markets
6GCC Presentation Autumn 2016
7. Insurance Practices:
Regionalised Insurance Management
Greater distance from physical assets
Lack of commitment to the process at a local or plant level
Lack of unified Global Policy
Inconsistent Inclusions and Exclusions
• Site improvements
• Foundations
• Below grade assets
• Non-operational assets, etc.
7
Compilation of Insurance Value
GCC Presentation Autumn 2016
8. Values reported in varying ways
Different concepts of Insurable Value
Replacement Cost
Net book value
Book value
Different insurance value sources
Recent or old Appraisal
Direct reporting of cost from Fixed Asset Register
Asset Value derived from acquisition of whole or part of the facility
Staff estimates
Standardised Property and Plant scenarios
8
Compilation of Insurance Value
GCC Presentation Autumn 2016
9. Values reported in varying ways:
Inconsistent accounting practices
Local capitalisation and depreciation procedures
Handled at plant, country, or regional levels
Different cost centres, etc. from legacy companies
Differing data formats
Varying levels of asset detail
Poor identification of assets
9
Compilation of Insurance Value
GCC Presentation Autumn 2016
10. Accounting issues
Treatment of transferred assets
Current or past inflation strategy
Values following acquisitions
Values for asset impairments
Assets not on the Register or misfiled
Assets, removed but still on Register
Original costs unknown
Expensed assets
10
Compilation of Insurance Value
GCC Presentation Autumn 2016
11. Technical data
Size and construction details of buildings
Poor construction cost information
Overall plant capacities
Production line capacities
Varying rates of inflation for buildings and equipment
throughout the business
11
Insurance Value Reporting
GCC Presentation Autumn 2016
12. Market Conditions
Still a “Soft Market” ?
Underwriters prefer well engineered/managed portfolios with:
Good supportable values
Accurate values for PML and EML
Professional risk management data
Current and appropriate Business Interruption data on both the limit and the
period of indemnity
12GCC Presentation Autumn 2016
13. Whilst property Insurance may be only one aspect of a businesses cover, the scale of
activities of many businesses are such potential losses could significantly impact the
future profitability and potential existence of the business itself
Accordingly it is important that the level of insurance cover is appropriate
The aim of a valuation exercise is to establish supportable opinions of value to enable
the underwriters to price the insurance coverage based upon the values and risks
involved
The development of a structured insurance appraisal program represents a quality
assurance process for the insurance function.
The benefits include the following:
Helping to determine the adequacy of insurance coverage
Establish appropriate allowances
Assisting with Improved risk management – substantively verifying assets
Improving risk marketability to underwriters
Serves as a basis for the allocation of premiums to business operations
13
Insurance Value Reporting
GCC Presentation Autumn 2016
14. Two major factors frequently influence the need to accurately determine and
maintain the values of insured assets:
Continued investment across a wide range of locations or across many
business subsectors
Increasing trends in construction costs, plus costs of general and
specialist plant and machinery
This is especially true across the Middle East, investment in new projects means
that many businesses add significantly to their insured asset base on an annual
basis.
The result is that the sums insured are rising sometimes rapidly.
Why Have a Valuation Program
14GCC Presentation Autumn 2016
20. Identification of high priority sites
• Based on value
• Risk profile
• Degree of confidence in existing values
• Sample sites by product
• Sample sites by business or region
Appraise specific number of sites per year
Builds a database for site comparison
Update previously valued locations/businesses
20
Appraisal Programmes
GCC Presentation Autumn 2016
21. Selection of appropriate valuation service level
Fixed asset review with brief site inspection
Macro asset listing by site inspection
Detailed asset listing by comprehensive site inspection
Business Interruption
21
Appraisal Programmes
GCC Presentation Autumn 2016
22. Fixed asset review with brief site inspection
Equipment
Requires accurate fixed asset list with true original costs
manufacturer, model, serial number, original cost, year of
acquisition and location within the property/business
Application of appropriate cost changes prior to site inspection
Onsite limited verification of existence of significant assets
Limited addition/deletion of assets based on findings
Limited re-costing to validate changing costs
Contents costs reported by building if identified in fixed asset
record, otherwise by overall site
22
Appraisal Programmes
GCC Presentation Autumn 2016
23. Fixed asset trending with brief site inspection
Buildings
Review of available as-built plans
Measuring of dimensions
Determination of primary construction components
Building services, interior and exterior finishes, etc.
Photographing each building
Replacement cost developed using local construction cost resources
Values and (COPE data if required) reported by building
Land improvements (if required), parking lots, signage, outdoor
lighting, etc.
23
Appraisal Programmes
GCC Presentation Autumn 2016
24. Macro Asset Listing by Site Inspection
Equipment
Create new asset listing, grouped by production line
Significant liaison required from local/corporate staff
Production lines – product, capacity
Replacement cost estimates working with local/corporate engineering
Support equipment grouped by building
Values reported by building
24
Appraisal Programmes
GCC Presentation Autumn 2016
25. Detailed asset listing by comprehensive site inspection
Equipment
Inspected and inventoried
Asset Number, Description, Model Number, Serial Number and Manufacturer
Predetermined equipment listing cut-off, suggested is US $100,000
Logical production lines and single assets with replacement cost US $100,000 listed
Asset below this cost grouped with like kind assets
Assets re-priced using a variety of sources
Values reported by floor by building
25
Appraisal Programmes
GCC Presentation Autumn 2016
27. Business Interruption Cover
Major Incidents often result in significantly more damage to a business
through loss of income, than in terms of direct property damage.
A BI Policy is intended to provide support to the Insured Business to
enable it to resume trading at the end of the indemnity period, in a
position no worse off than if the incident had not occurred.
The policy aims to:
Recover the business as quickly as possible
Enable the business to continue to trade through the disruption caused
by the loss
Enable the business to retain its existing customer base
27GCC Presentation Autumn 2016
28. Business Interruption Cover
A BI policy is essentially an indemnity contract, whereby the business will
be restored to the same, but not a better trading position.
It is important to understand that the BI policies require more adaptation
to the specific business circumstances of the Insured than property
damage policies as an “off the shelf approach, rarely captures the
individual circumstances
BI Cover provides support to the business for as long as it takes to restore
the business to the pre-loss state.
In this regard the Period of Indemnity is critical as unless this is sufficient,
support for the business under the BI policy will end, before the
restoration of the business position is completed.
28GCC Presentation Autumn 2016
29. Business Interruption Cover
A BI policy should work alongside the property damage policy as the latter
is needed to ensure the assets physically lost can be restored.
Normally within a BI policy, the “Material Damage” clause will state
A requirement for a policy covering the physical assets (even if not
insured directly e.g. leased buildings insured by the landlord) and
For an incident to have taken place which is covered under the terms
of such a policy, in order for a claim to be made under the BI cover
The Policy wording is typically:
“ The insurers will pay the amount of any consequential loss resulting
from the interruption of or interference with the business carried on by the
insured at the premises consequent upon damage to the property”
29GCC Presentation Autumn 2016
30. Business Interruption Cover
Obtaining appropriate BI cover is frequently much more difficult than
property cover as:
No two businesses are the same and therefore each risk and cover
is different.
Businesses can have completely different business circumstances
and results, from the same set of assets.
Identifying a potential/loss is difficult to identify and quantify.
Establishing the appropriate cover involves analysis of financial data
which is not always readily available.
Cover involves forecasting business activity, against the background
of sector and economic trends.
Essentially the aim is to assess the difference between the business if
the “damage” had not occurred and the business once the “damage”
has occurred.
30GCC Presentation Autumn 2016
31. Business Interruption Cover
As an example three types of business with differing circumstances,
where the assessment of potential loss involves differing challenges:
Growth Phase Companies
Limits need to be established, based upon future growth forecasts.
Seasonal or Cyclical businesses
The losses can vary significantly, depending on the point in the
cycle at which the loss occurs.
Establishing an appropriate basis and period of cover, can be
challenging.
An average can leave Insurer and Insured at risk.
Multi level businesses, with extensive interdependencies
31GCC Presentation Autumn 2016
32. Business Interruption Cover
It is vital not only to set a Period and Limit of Indemnity, but to
specify the constituent parts of a business that might be affected by
an interruption.
Global policies for larger businesses, tend to specify broad
definitions such as…
“All present and future activities….”
“Any premises owned, occupied or utilised…..”
For smaller businesses, the BI policy can be restricted to specific
activities and properties.
The onus is on the Insured to advise the Insurer of changing
activities.
32GCC Presentation Autumn 2016
33. Business Interruption Cover Common Elements
Amongst the most common elements covered under a BI
policy are :
Gross Profit
Revenue
Loss of Fee Income
Loss of Income
Extra Expenses
Increased Cost of Working
Loss of Rent
Loss of Debts
It is important that the cover fits the circumstances of the
business being insured.
33GCC Presentation Autumn 2016
34. Business Interruption Cover- Gross Profits
Gross Profits is the most common basis of BI cover,
especially for manufacturing and production businesses,
where a large element of the turnover comprises variable
expenses.
If the insured ceases to produce, the input of raw materials
and other variable costs will cease and the policy aims to
cover loss of profits and fixed (non variable) expenses,
which the insured will continue to incur.
Gross Profit is an insurance specific definition and should
not be confused with the accounting definition of gross
profit.
34GCC Presentation Autumn 2016
36. Indemnity periods are Important
Cover ceases on the expiry of the indemnity period.
Premiums are levied based on a multiple of the gross profit
and the indemnity period.
Many organisations make an “educated guess”, at how long they
would be disrupted following a major incident, without any real study
of the potential effects of major losses.
Time to rebuild facilities
Restart of supplier relationships
Recovery of customers/sales
These “ educated guesses”, can be well short of reality and often
are for periods less than 12 months and hence the standard
indemnity period of 12 months often can seem “comfortable”.
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Period of Indemnity
GCC Presentation Autumn 2016
37. Manufacturing businesses usually have significantly longer indemnity
periods, when compared with service businesses.
Interaction between facilities within a group, or with key suppliers gives
rise to potential issues, in determining the Period of Indemnity and also
the overall indemnity limit.
Businesses dependent on “Just in Time “ supply or delivery chains, can
be fatally damaged in very short periods and accordingly very specialist
cover may be needed, as a 12 month standard indemnity period may
have no relevance – A maximum loss limit may be a more relevant
basis.
When setting an indemnity period, the “worst case scenario” should be
considered and the impact it will have on all aspects of a business, not
just the location directly affected by the incident. which prompts the
claim
Whilst there are many variables, a number of general factors should be
considered in determining an indemnity period, including….
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Period of Indemnity
GCC Presentation Autumn 2016
38. Safety and Debris Removal - Time taken to make the site safe and
remove debris.
Site Preparation - Time taken to repair/prepare site to accept new
facilities.
Rebuilding Time – As a BI claim is triggered by a physical event, in
the form of a loss to insured physical property, the rebuilding time for
the physical assets is a critical item, in determining the Period of
Indemnity
• Within the overall rebuilding time, the replacement of any critical
items of equipment, which for manufacturing operations can be the
longest time factor, in restoring the business to normal operations.
Retraining – Over a protracted rebuild period staff may be lost, or for
older facilities new control systems may be used, necessitating a period
of retraining for existing staff.
Re-commissioning - Once completed, process operations may require
considerable periods of commissioning and subsequent approvals before
the products can be sold, (i.e. FDA)
Return to Market position - The object of the cover, is to restore the
business to the same trading position as prior to the incident and
accordingly, a period will be needed to rebuild sales etc.
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Period of Indemnity
GCC Presentation Autumn 2016
39. On major process plants, the total Period of Indemnity needed can
routinely run to 36-48 months, especially if the process is highly
specialised and alternate sources of manufacture are restricted.
Lead Times for Specialist Capital items between 2005 and 2009, for
example went from:
• HV Transformers 6 months - 12 Months
• Offshore Platforms 24 months - 48 Months
• Chemical Process Unit 18 months - 36 Months
Restricted supply for large capital cost items, together with rising
commodity prices, can significantly drive up equipment costs and
lead times, with a consequent knock on impact, on the required
period of indemnity.
Accordingly the Period of Indemnity should be regularly reviewed.
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Period of Indemnity
GCC Presentation Autumn 2016
40. To accurately assess the Limit of Indemnity a full financial review
needs to be undertaken of not only the past Audited Accounts, but
also the current Management Accounts and business dependencies
The review needs to look at the Gross Profit as set out in in the
Policy definition plus the many external factors, which can affect the
cover and the insured limits:
Is the business dependent on specified customers
Are the premises likely to be subject to Denial of Access
Is the business dependent on externally provided utilities,
electricity, water, gas, etc.
Is the business dependent on specified suppliers and are there
alternatives
All the above factors combine to fix the limit and the cover for
the necessary extensions.
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Limit of Indemnity
GCC Presentation Autumn 2016
41. Gross Profits based policies are most appropriate for risks where a high
proportion of turnover is driven by variable costs, for example purchases
of raw materials.
Gross Profits is defined for insurance as:
Turnover
Plus Closing Stock and Work in Progress
Less Variable Costs, Opening Stock and Work in Progress
This differs from the standard accounting definition of Gross Profits
which is:
Net sales less Cost of goods sold or alternatively
Net Profit Plus Fixed Costs
The most significant difference is in the recognition of “semi variable”
costs
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Limit of Indemnity – Gross Profits
GCC Presentation Autumn 2016
42. The most significant semi variable costs are
Wages and Salaries
Utilities
Wages and Salaries are considered a variable cost by accountants as
far as they relate to manufacturing staff. Whereas in the event of a
BI claim, unless there is a prolonged interruption, there is likely to
be an attempt to retain most if not all employees, to avoid undue
problems at the restart of activities.
Utilities typically consist of two elements of cost, a fixed, standing
charge and a usage based cost. In the event of a BI claim whilst
the usage element may be eliminated or reduced, standing charges
will remain.
In times of high escalation, one method of mitigating against
increasing energy costs has been to agree deals with an agreed
minimum purchase level. Here again the nature of these
commitments should be considered.
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Limit of Indemnity – Gross Profits
GCC Presentation Autumn 2016
44. Appraisal Benefits
The development of a structured insurance appraisal program represents a
quality assurance process for the insurance function.
The benefits include the following:
Helping to determine the adequacy of insurance coverage
Establish appropriate indemnity periods
Assisting with Improved risk management
Improving risk marketability to underwriters
Serves as a basis for the allocation of premiums to business
operations
44GCC Presentation Autumn 2016
45. What to do when considering a valuation:
Identify the availability of internal human resources
Review the quality of data available within the organisation
Look at the spread of the asset base (geographic, sector and risks)
Look at external data sources to see what if any will help
Look at external valuation consultants and discuss alternative
approaches
Devise a valuation programme that meets your needs
Set realistic objectives, timescales and budgets
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Factors to consider
GCC Presentation Autumn 2016
46. Contact Information
46
InfraConsult ARAS Limited Tony J Prior MIRM MInstPet
UK Registration No. 09433075 Mobile: +44 7917 307909
C/O Brennan Herriott & Co E-mail: tony.prior@infraconsult.co.uk
1 Blatchington Road 37 Woodruff Avenue
Hove BN3 3YP Hove BN3 6PH
United Kingdom United Kingdom
Phone: +44 1273 565393
Web: www.infraconsult.co.uk
GCC Presentation Autumn 2016