Zurich North America is introducing a new tool to better evaluate business interruption exposures and calculate coverage needs, the company announced today. Going forward, Zurich will use the tool, known as the Business Interruption Coverage Calculator, as part of its underwriting procedure for business interruption insurance.
Lisa Powers, Manufacturing Services Unit product manager, said, “The insurance industry has long felt frustrated by the inability to achieve accurate revenue valuations and time element exposures as we write business interruption insurance. Current methods are out of date, based on an older, manufacturing economy that no longer reflects the way our customers do business. We recognized the need to develop a valuation method that reduces variability and one that can be used universally, across business lines.
“Strategically,” Powers added, “we think the tool we’ve developed will give customers, agents, brokers and insurers a broader understanding of the entire insurance process, as well as engender a deeper understanding of the customer’s business.”
The Business Interruption Coverage Calculator is a web-based tool designed to elicit more accurate valuations of a company’s revenue and operating expenses. Using the Coverage Calculator, underwriters will focus on such operating details as alternative operating venues, computer data backup systems, spare parts supply and e-commerce activities – all components that could affect revenue and operations during an interruption of business. Rather than the insurance terminology used in the current ISO (Insurance Services Organization) forms, the Zurich tool uses the GAAP terminology that most businesses now use routinely.
“Our aim is to be smarter about gathering and using information — a true knowledge management approach,” said Powers. “This tool encourages the users to work together to elicit more precise information, produce more sophisticated data, and take a more expansive view of liabilities and coverage requirements. It’s a more thorough approach and more time-consuming, but the end result is specialized knowledge that results in superior client service.”
Manufacturing Services cultivates products, services, practices and platforms to drive superior, sustainable financial results for Zurich North America and value for Zurich North America customers. The unit’s enterprise-wide focus includes the mining, management, and sharing of data, knowledge and best practices among Zurich North America’s market-management business units. The unit also creates and implements underwriting guidelines, models and tools to help ensure common business processes and to support the company’s overall financial goals for each line of business. Central to this effort are state-of-the-industry underwriting workstations, which are designed to optimize decision-making and create an enduring competitive advantage.
Topics Business Interruption
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