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Empowered to prevent property losses: Online tool helps clients take action with data

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The devil is often in the details. In other words, problems arise when attention is not paid to details. When managing property risks, attention to details is important and having access to all of the details is the backbone of an effective property loss prevention program. 

That’s why XL Group’s team of 190 risk consultants, also known as XL Global Asset Protection Services (XL GAPS) developed MyAnalysis, a web-based platform that offers sophisticated, flexible online reporting capabilities to help customers make sense of detailed property risk data. This allows them to improve their loss prevention and control efforts and protect their assets more effectively. 

Via an electronic filing cabinet on the XL GAPS website, clients can access all available loss control information 24 hours a day 7 days a week. MyAnalysis then takes these reports to a whole new level of usefulness, combining industry standards, risk management strategies and loss control techniques with customer data. MyAnalysis accomplishes this by offering XL Group’s clients more than two dozen different types of reports -- available in English, French, German or Spanish — with user-applied filters to identify property exposures and set strategies for addressing them.

Powerful insights
The most powerful functionality of MyAnalysis is the filtering capability, letting customers focus risk mitigation efforts quickly; for example, focusing on only those locations over a threshold property value that require risk improvement. Additionally, a client, broker or underwriter using the tool can view data a single location level, a division level, or for all properties globally. Data presented in the platform originates largely from property loss prevention surveys conducted by XL GAPS Risk Consultants. Functionality allows clients to upload documents, print or export reports, and authorize access to their data on the platform.

 

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Guiding Action

MyAnalysis utilizes Risk Quality Ratings, which are assigned to individual client locations on a scale of 1 to 10, with 10 being the highest quality of property risk.  The ratings are issued by XL’s Risk Consultants based on an evaluation of several risk factors including:  construction features, sprinkler protection, water supply, surveillance, warehousing protection, special hazards, management programs and pre-emergency planning.

Using the Risk Quality Ratings reports, clients can:

-       Identify at a glance where to focus improvement efforts or investment;

-       Produce a scorecard for a given location to share with site level management;

-       Identify locations that could benefit from “Best Practices” in place elsewhere;

-       Assist corporate management in benchmarking divisions or locations globally;

-       Drive behavior to increase loss control and lower a company’s total cost of insurance.

 

Another important element of MyAnalysis includes the ability to manage recommendations issued during property loss prevention surveys. Users are able to view details of a specific recommendation, the expected cost benefit, and the implementation of those improvements by site management.  For instance, the “RCBA Summary” (Recommendation Cost Benefit Analysis) report quantifies the recommended cost benefit associated with each loss control recommendation. Hypothetically, an XL GAPS consultant may recommend that a client with a large unprotected electronics equipment warehouse in Asia install automatic sprinkler protection.  Using the RCBA Summary report, corporate and site management would understand that the loss expectancy before implementing this recommendation would be approximately $900 million (a total loss of the facility) vs. $3 million following installation of the fire protection system which would be anticipated to successfully control a fire event. 

Loss Snapshots

Other examples illustrate the Maximum Foreseeable Loss (MFL); Probable Maximum Loss (PML) and Normal Loss Estimate (NLE) reports for each site. The NLE is an important analysis for a risk manager as this loss expectancy often falls within a large company’s self-insured retention (SIR). Reducing NLEs of a property portfolio helps risk managers preserve capital and make their organizations more attractive risks to insurers.

The MFL vs. Risk Quality Rating report portrays the MFL and Risk Quality Rating, breaking down the MFL into property loss and time element loss estimates. The time element is the estimated business interruption loss that would result from the facility being offline following a major loss event.  To better illustrate its use, suppose an XL Group client with a large pharmaceutical plant in Germany has an MFL estimate in excess of $4.1 billion and a Risk Quality Rating of 5.5 (within the “Fair” range).  The loss scenario leading to the MFL event is a fire occurring with the sprinkler protection impaired (out of service), no functioning fire water supply, and no manual firefighting capabilities.  As illustrated in the report, XL GAPS would estimate that such a fire event would destroy almost all of the pharmaceutical plant and shut down its operations for 24 months. Separately, due to deficient fire protection in the detached finished goods warehouse, the NLE estimate for this location is $75 million. The PML estimate for this site is $1.55 billion due to the absence of fire wall separation in one of the production buildings.  By any measure, such a high valued location calls for maintaining robust property loss control programs and physical property protection measures.

Setting Priorities

The Hazard Quadrant report offers a graphical representation of special hazards at individual locations by impact to operations and level of protection, letting clients identify areas of critical importance and deficient protection. Special hazards might include operations utilizing flammable gases, combustible liquids, equipment sensitive to contamination, etc.  Quadrant I represents hazards with a high impact to operations and a low level of protection – in other words, hazards that present the most severe exposure to the site. Quadrant II includes high-impact and highly protected hazards. Quadrant III includes hazards with a low-impact and low level of protection. And finally, Quadrant IV includes low-impact hazards that are highly protected.  XL GAPS recommends immediate investigation of hazards in Quadrant I and additional investigation of hazards in Quadrants II and III. Quadrant IV generally requires no further action by the client.

The ability to slice and dice data across a global portfolio of properties provides powerful insights to our customers’ property exposures while lowering their total cost of insurance. With innovations like MyAnalysis we’re making life easier for XL Group’s customers and brokers.

About the Authors. . .

Marc Musikoff and Mark Driscoll are Risk Consultants for XL GAPS.  Learn more about XL GAPS and MyAnalysis

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