Fixed assets valuation for insurance purposes

Client

Large Energy Company

Objective

Optimisation of the insurance coverage for machinery and other fixed assets, as well as reinsurance of risks associated with their chemical, petrochemical, oil and gas refineries, within a stringent time limit of ten business days.

Approach

Swiss Appraisal consulted with the stakeholders, developed, and agreed a scope of works involving:

• collection and analysis of all relevant financial information;
• identification and physical inspection of the appraisal objects to determine CRN/COR, physical deterioration, and ACV;
• preparation of a comprehensive valuation report explaining the methodology and procedures followed in accordance with international valuation standards, including:
  • cost approach for fixed assets - real estate per square meter, including design features and area;
  • mathematical models that considered both the actual and normative lifetimes of the objects and constructive elements;
  • comparative unit method - priority method and one widely accepted among participants in reinsurance market, used to estimate CRN/COR, taking a modern analogue as basis for appraisal.

Results

Swiss Appraisal`s valuation report clearly, concisely, and accurately presented the CRN/COR/Depreciation/ACV of all assets within the scope of the valuation, allowing the client to achieve their objective to better manage financial and business risk.



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