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ICC Expo – ISO Educational Pavilion Long Beach, California
September 2015
Dale Thomure, CBO,CFM Manager – Community Mitigation
Come and see us in booth 520!
About the presentation today……
Who are we? What do we do? The Building Code Effectiveness Grading
Schedule (BCEGS) National data about building code
enforcement efforts BCEGS data application Academic studies about building code
enforcement Future development of BCEGS
Verisk Analytics, Inc. Leading supplier of
Statistical Actuarial Underwriting
information Standardized
coverage forms Class & rating
programs Licensed rating
organization Advisory services
Analytic Capabilities
• Insurance underwriting • Insurance claims adjusting (including fraud)
• Data management
More than 500 employees with advanced degrees, certifications, and professional designations in statistical modeling, engineering, geology, economics, health economics, and many other disciplines
500+
6,000+ Employees
Actuarial Professionals 200+ Property/Casualty
Underwriters 145 Including:
Strong Domain Expertise • Financial services • Healthcare
• Supply chain and environmental health and safety
Property & Casualty
A Verisk Analytics Business
Risk Analysis
Healthcare
Financial Services
ISO – Community Mitigation Programs
Public Protection Classification (PPC ®) Program Building Code Effectiveness Grading Schedule (BCEGS®) Specific Commercial Property Evaluation Schedule (SCOPES®) *FEMA/NFIP Community Rating System (CRS) * Administrator of program
Scope To measure the resources and support made
available and applied to building code enforcement, as well as the utilization of the resources, as applicable to the mitigation of losses resulting from natural hazards common to the jurisdiction being measured.
BCEGS Program Scope/Objectives
Objectives Improved building codes and enforcement Better, more catastrophe-resistant buildings Reduction of property losses Reduction of economic and social disruption
as a result of a catastrophic event
BCEGS Key Program Elements Minimum criteria for inclusion Assigns a rating of 1-10
Personal Lines Rating Commercial Lines Rating
Updated on a 5-year cycle Areas of review
Administration of codes (54%) Review of building plans (23%) Field inspections (23%)
BCEGS Schedule Format Point-based system – 100 point scale
Eligible for points in each section Prorated credit
All in the Numbers Permits Plan reviews Inspections Responsibilities Training Certification Continuing education Budget information Public awareness Property value
BCEGS Scores Across the Nation What do the Scores Mean?
Classes 4 to 6 (approximately 58% nationwide) Adopted model code – Unamended, latest edition (within 5 years) Strained staffing levels for plan review and/or inspection Staff education and/or certification at minimal levels
Classes 1 to 3 (approximately 21% nationwide) Adopted model code – Unamended, latest edition (within 5 years) Exceptional staffing levels based on workloads Staff education and certification at very high levels
Classes 7 to 10 (approximately 21% nationwide) Adopted model code – Amended to weaken and/or older editions Inadequate staffing levels for plan review and/or inspection Inadequate education and/or certification at minimal levels
BCEGS Scores Across the Nation
0.1% 3.1%
18.0%
34.0%
18.2%
5.9%
2.5% 1.3%
14.0%
2.8%
0.00%
10.00%
20.00%
30.00%
40.00%
1 2 3 4 5 6 7 8 9 10
Commercial Lines
BCEGS Scores Across the Nation
Inspection Certifications
Plans Examiner Certifications
Training
Plan Review Workload
Inspection Workload
Jurisdiction Results Benchmarking Report
Background information Code adoption Training and certification Staffing levels Point analysis Natural hazards Unique customized report
BCEGS Application
BCEGS and Insurers How does BCEGS aid the insurer?
• Identification of differing rigor in code enforcement • Increased certainty in risk assessment • Building Underwriting Reports • Analysis of portfolio risk • Prediction of extent of loss • Enhanced Wind Rating Program
• Informed Decisions
BCEGS and the Community How does BCEGS help my community? • Enhanced resilience for homes and businesses • Identification of state and regional trends and benchmarks • Detailed information about resources • Greater choices in insurance offerings • Potential premium discounts • Potential reduced deductibles • Lower frequency of fire loss
National BCEGS Data Application Building Underwriting
Reports (BUR) Building Specific
350 K Yearly
BCEGS in BG II Loss Cost Advisory Loss Cost is a projection of an insurer’s average
future loss and loss adjustment expenses Delivered for both BG I (primarily fire) and BG II (primarily
wind) Based on Construction, Occupancy, Protection and
Exposure (COPE) information published by Verisk Developed using field-verified property information as well
as historical premium and claims data BCEGS factor can be used by insurers to adjust the BG II
loss Cost Utilizes ISO’s 3 rating schedules – Primarily SCOPES,
FSRS and BCEGS
National BCEGS Data Application
National BCEGS Data Application Enhanced Wind
Rating Program Modification to Loss-
Cost based on details specific to a building
National BCEGS Data Application Community Rating
System (CRS) 432.h BC2 credits the community’s Building Code Effectiveness Grading Schedule (BCEGS) classification.
National BCEGS Data Application FEMA
National BCEGS Data Application FEMA Hazard Mitigation Grant Program
Part of Hazard Mitigation Assistance (HMA)
Additional 5% Initiative 5% may be used to fund
additional hazard mitigation measures
May increase up to 10% for additional activities that promote disaster-resistant codes
Must adopt disaster-resistant codes or improve BCEGS score.
National BCEGS Data Application Academic, Government
and Insurance Industry Studies
Wharton Study – Further Validation of BCEGS
“ISO’s BCEGS ratings provide a joint assessment of both the stringency of adopted codes in addition to how well these adopted codes are enforced.”
“A midsize community of 50,000 people that experiences a moderate hail storm could expect to reduce losses by approximately $4 to $8 million by adopting and enforcing appropriate building codes.” “Communities with a favorable BCEGS score can expect a 12 – 18% reduction in damage as compared to less favorable scores.”
FEMA NMSZ Report – Usage of BCEGS Data
“In order to understand the status of the local building codes, the Building Science Branch of FEMA Federal Insurance and Mitigation Administration (FIMA) has been working with Insurance Service Office, Inc. (ISO) and other partners to track building code adoption and enforcement conditions at the local level.”
“The statistics indicates that the NMSZ is lagging behind the nation in adoption of building codes. As people in the area commemorate the bicentennial great New Madrid earthquakes, FEMA and the National Earthquake Hazard Reduction Program call on the local communities to take full-strength building codes for protection against earthquake risk in the area.”
ISO Fire Frequency Study
33
0.000
0.500
1.000
1.500
2.000
2.500
3.000
3.500
15-25 25-35 35-45 45-55 55-65 65-75 75-85Aver
age
Annu
al F
ires (
avg
'09-
'11)
/ 1
k pe
ople
('1
0 ce
nsus
)
2011 State BCEGS score
Fire Frequency by state BCEGS Score category
Sources: • 2010 Census • NFIRS • BCEGS
database
ISO Fire Frequency Study
34
0.0
5.0
10.0
15.0
20.0
25.0
15-25 25-35 35-45 45-55 55-65 65-75 75-85
Fire
dea
ths p
er m
illio
n pe
ople
(201
0)
2011 State BCEGS score
Fire deaths by BCEGS score category
Sources: • USFA • BCEGS
database
BCEGS Future Development
Schedule Revision Project 2016 Increased emphasis on
enforcement activities Certification Training Experience
Frequency of code adoption Updates to match trends in
industry
Questions?