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Conference 2022 – Cyber Discussion Panel
March 30, 2022![](https://unimutual.com/wp-content/uploads/2022/02/CEO-connect-image-2000x800-1.png)
CEO Connect #2: Conference recap and 2022 Roadmap update
April 8, 2022Unimutual Property Valuation Guidelines have been developed to assist in creating uniformity and consistency in the declaration of member assets for protection. They can be used by members when providing a scope of work to their chosen professional valuer.
A professional valuer is licensed or registered by the appropriate state body to practise as a qualified valuer.
These are guidelines only, prepared to assist members and their professional valuer in providing property valuations to be declared for protection by Unimutual. The guidelines do not prescribe any specific valuation methodology and are to be used as a guide only. Members should seek advice on any specific valuation issue from their selected professional valuer.
Valuations have become a hot topic in the insurance and reinsurance markets. A number of losses in the Australian market in recent year have highlighted inadequate valuations and/or undeclared properties. This has been exacerbated by supply chain issues, inflation, and demand surge post event. Traditionally a lot of insureds use CPI for their asset valuations in absence of a professional on-site valuation. In recent years building cost inflation outpaces CPI and valuations turn out to be inadequate in the current market. According to the most recent ABS figures non-residential building costs rose by 6.4% during the twelve months period to December 2021. In the same period CPI increased only by 3.5%. The problem of inadequate indexation increases the longer the gap between professional onsite valuations is. This highlights two important issues: a regular professional insurance valuation capturing full replacement values of assets and adequate indexation in between professional onsite valuations.
Members must declare the full value of property at each location at the commencement of each Period of Protection. The professional valuation should be no greater than three years old at the commencement of the period of protection. During the intervening period valuation allowances need to be made for additions and deletions and appropriate increases/decreases in the Building Price Index need to be taken into consideration. Contents should be professionally valued at the same time and updates made during the intervening period allowing for additional, deletions and Consumer Price Index increases/decreases.
We recommend to discuss the adequacy of indexation with the valuer at the time of the professional valuation. A professional valuation is understood to be undertaken onsite involving a “walkthrough” process or it can be on the basis of a desktop exercise. It is recommended that onsite valuations are conducted at least every three years.