Designing a Multifamily Property Risk Evaluation Model
Insurance underwriters face challenges in accurately assessing multifamily property risks due to the limitations of conventional risk assessment methods. These methods often overlook critical operational behaviors, resulting in imprecise risk evaluations, higher insurance premiums, and missed opportunities to incentivize responsible property management.
The solution to these challenges is the Live Risk Indicator (LRI Score).
Ranging from 0 to 900, this dynamic scoring system is based on an algorithm that integrates data from a unified property operation and maintenance platform, along with key data points from the Statement of Values (SOV) of each property.
By combining physical property attributes and real-time analysis of management operations and safety behaviors, the LRI Score provides insurance underwriters with a complete tool to make more informed and consistent decisions.
The LRI Score represents a significant improvement in the field of multifamily property risk assessment. Much like credit scores reshaped creditworthiness evaluations and telematics improved auto insurance, the LRI Score offers a new perspective.
This score contributes to a more structured, stable, and objective approach to insurance underwriting, providing a well-rounded and dependable risk assessment process.
It sets a new standard for risk evaluation, helping underwriters price insurance more accurately and providing brokers with useful tools to reward responsible property management.