Articles & Briefs

Ecosystem Partner POV: e2Value on Property Intelligence and Underwriting

Skip Coan, SVP of e2Value joined Cogitate to discuss the recent economic trends impacting homeowners and commercial property insurance. Skip addressed the undervaluation of properties due to escalating replacement costs and how e2Value is working hard to educate the industry on rectifying this problem.

Cogitate’s DigitalEdge platform integrates with e2Value to place current, accurate property data at the fingertips of underwriters to easily evaluate property risks and calculate the replacement value of improvements– solving a historic problem for the insurance industry exacerbated by today’s inflationary conditions.

How big is the problem of undervaluation?

“Undervaluation has been a problem for decades – but now with rapidly rising building, labor, and shipping costs, the gap is widening dramatically, leaving an even greater risk of underinsurance. We urge insurers to run evaluations of their books often enough to clearly understand any gaps in coverage to allow property owners to make educated decisions about the level of protection they purchase.

As of April of 2023, we had run tens of millions of policy addresses through our data sets and on average found at least 50% underinsured based on current replacement values. In addition to inflationary impact, additions, alterations, and improvements to homes are unlikely to be reported to insurers. Without third-party data sources to identify material changes, these also contribute to underinsurance.

While the problem is industry-wide, we most often hear about this post-disaster when a state DOI study is conducted. These studies often reflect demand surge which can also exacerbate the problem in the short term. A perfect example is the Marshall fires of Colorado in 2022 where 83% of the damaged homes were found underinsured – ranging from $99,000 to $240,000 per risk.

When a catastrophe hits, if a property is underinsured, even a partial loss can become a total loss because the replacement cost often hits the policy limits.” 

Policyholders do not have readily available replacement cost indicators and are most often reliant on market values (Zillow or real estate assessments) to self-evaluate their coverage needs. This can lead to surprise, disappointment, and financial hardship when the policyholder becomes a claimant.

What type of data is necessary?

“Property intelligence that includes accurate, local material and labor costs, shipping costs, and current building codes are critical to the quoting process to properly price risks at the outset and eliminate this potential value gap from compounding year over year among your best, long-term customers. For commercial properties, access to building codes is particularly important, especially for large, older buildings. Our replacement cost for commercial properties will always reflect a commercially viable space based on local building code because, for example, the code may restrict you from replacing a brick and wood structure with anything other than steel and masonry.

Commercial property occupancy data is also critical to risk evaluation. Nearly 50% of the occupancy information insurers have on commercial properties is inaccurate. Depending on the usage, the risk can increase considerably, and changes go unnoticed unless the insights are available to identify those changes that occur post-underwriting. Finally, geographical details for all property types are essential to exacting distance from natural hazards such as coastal proximity.”

How hard is it to independently source and ingest property data?

“It’s a hard thing to do, even in very large companies. Data is not uniform, so you have to ingest it and convert it into useful insights. Our platform does that by converting public record data into meaningful values 90% of the time with just an address and we do it in less than 2 seconds. For insurers, accessing an ecosystem of providers from a single platform is critical. Underwriters can’t work effectively accessing multiple systems for intelligence gathering.”

Are there other benefits to these insights?

“Our customers have shared that in the current market, the conversations with reinsurers are difficult. When they tell the reinsurers that they work with e2Value, test and run their books often and monitor cost differentials, it helps those conversations considerably. We spend a considerable time with the London markets and they’ve expressed frustration with the US market valuations. They want the right data, the right values, and more importantly, they’re holding the US markets accountable for it.”

Any final advice for insurers?

“Test your book all the time, as often as you can, as effectively as you can. Run your book and run your renewals. Look for outliers and make adjustments. Everyone is afraid they’ll lose business if they raise rates. We’re just advising that you understand your gaps in value and begin to make adjustments before the losses impact your policyholders and your ratios.”

Powered by data-driven and digital automation technologies Cogitate DigitalEdge Policy brings transformational efficiencies to the traditional underwriting process. To learn how Cogitate can help your underwriting team contact us today!

Authored by Pam Simpson, Director of Content & Marcom

Pam brings a decade of insurance content creation to her role as Director of Content and MarCom at Cogitate. Her passion for insurance technology and ecosystem partnerships stems from her former role as Director of Content Strategy and Research with Carrier Management and Insurance Journal working with stakeholders across the insurance value chain. She has authored numerous eBooks and research reports, hosted and produced webinars, and developed podcasts for the P&C Insurance Industry over her tenure.
Find Pam on LinkedIn or email with comments and questions at

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