Market Overview

Surge in Premium-Impacting Remodels Creates Blind Spot for Carriers, BuildFax Reports

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New report reveals misalignment between premiums and exposure, citing
almost 60 percent increase in remodeling activity since 2009

BuildFax,
a leading provider of property condition and history insights for the
largest insurance and financial institutions in the world, released a
report today detailing how its Change Detection insight can more closely
align increased exposure with additional premium capture as the pace of
remodeling continues to accelerate.

The new report—which leveraged BuildFax's more than 23 billion data
points on property condition and history—revealed a 58.9 percent
increase in residential remodeling activity from 2009 to March 2018,
compared to a 36.2 percent decline from 2005 to 2009. Commercial
remodeling activity has advanced at a slower rate, increasing by 16.3
percent in the same time frame, compared to a respective 14.4 percent
decline leading up to 2009.

"As homeowners continue to remodel existing properties—and in light of
the upcoming hurricane season—carriers must be vigilant in addressing
changes to their insured's properties," said Jonathan Kanarek, COO of
BuildFax. "Leveraging our depth of data and insights enables carriers to
optimize inspection strategies, reduce operating costs and ultimately
recover premium leakage at scale."

Results of the report revealed a number of insights carriers can
leverage to simultaneously mitigate risk and create new pathways to
profitability:

  • In the first half of 2018 alone, BuildFax data showed that residential
    remodels increased 8.6 percent and commercial remodels increased 3.2
    percent, compared to remodels in the first half of 2017.
  • Permits for alterations, additions and remodels were pulled for 40.4
    percent of residential properties and 47.4 percent of commercial
    properties in the last five years.
  • 9.7 percent of residential properties and 24 percent of commercial
    properties experienced remodels valued at more than $25,000 in the
    last decade.

Without visibility into property changes, the resulting exposure from
even a fraction of remodels creates unsustainable risk that directly
impacts a carrier's bottom line. With BuildFax's Change Detection
insight, carriers are able to stay on the pulse of key property changes
and verify that the properties on their books are insured to value.

For access to the full report, click here.
To learn more about BuildFax and its Change Detection insight, visit www.buildfax.com.

About BuildFax

BuildFax, headquartered in Austin, Texas, is trusted by the largest
insurance and financial institutions in the world to deliver
business-critical property condition and history data. With the only
database of its kind encompassing more than 23 billion data points on
commercial and residential structures, BuildFax delivers detailed data
on remodeling, solar installations, new construction, roof age, major
systems, maintenance history and more. To learn more about BuildFax,
visit www.buildfax.com.

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