Controlling losses—in 3-D: for risk managers in the market for diagramming software, it pays to do some research, especially with regard to the needs of their own companies

Risk & Insurance, Oct 1, 2003 by Janice White

If you're a loss-control manager like Ken Fischer, and wish for electronic versions of building diagrams, you're not alone. For years, loss control managers have dreamed of three-dimensional images of buildings popping up on their laptops at the push of a button. For years they've wondered whether it would ever be possible to leave behind the drudgery of draftsmanship.

"Before going to the diagramming software, we basically used graph paper and would hand-draw a rough sketch of the buildings," says Fischer, who works for Amerisure Mutual Insurance Co., based in Farmington Hills, Mich.

Fischer works with 40 field loss-control consultants nationwide who use drawing software from The CAD Zone Inc., a vendor based in Beaverton, Ore.

The CAD Zone Inc. is one of dozens of vendors nationwide that specialize in writing diagramming software used by risk managers.

The benefits of the software soon became obvious and immediate to Fischer and his team, as field consultants found they were able to electronically update models of risks to buildings.

Fischer says one of the benefits of the software is that the electronic diagrams give underwriters more details of building floor plans.

The software computes risk scenarios based on data on building measurements like the thickness of walls, the loads carried by beams, and the positions of windows, fire doors and sprinklers. The software also shows exterior risks such as rivers, lakes, railroad tracks, and nearby roads.

It is this level of detail in the drawing that, coupled with the written reports, enables the underwriters to more accurately assess the risks associated with the structure of a building.

Updating the diagrams takes only minutes. Sharing them with underwriters is easy, says Fischer. Most drawing programs are not complicated and require little time to learn and use. The programs are a good fit for loss-control insurance companies of any size, says Fischer. Because diagrams created with the Insurance Zone are electronic files, they can be attached to Amerisure's electronic reporting system, Fischer says. This, in turn, allows underwriters to view the diagrams after the maps have been submitted by consultants in the field.

Ultimately, whatever diagram is erected for a client's building, it must come with a written loss-control report before going to an underwriter for risk assessment and estimated insurance coverage.

At Amerisure, for instance, once a diagram is completed, it can be viewed through a viewing engine installed on desktops. Underwriters look at diagrams showing the information contained in a loss-control report, which can be e-mailed to other departments.

It's not uncommon for an underwriter based in Dallas, for example, to be discussing a property with the corporate underwriting division in Farmington Hills. Michigan. "They both can be looking at the diagram at the same time," Fischer says. "So, the key is the immediate sharing of information versus a paper diagram that would have to be mailed."

Symbols Library

At Union Standard Insurance, loss-control consultants prepare diagrams of every insured property. Union Standard requires strict adherence to standards and codes set forth by the National Fire Protection Association (NFPA).

As a result, NFPA symbols are part of the company's symbols library. Symbols typically used are for building construction walls and parapets, above- and below-ground tanks, water supply distribution hardware such as the valves and risers, hydrants and fire extinguishing systems.

Jamie Hernandez, Union Standard Insurance's loss-control manager, considers diagramming software and NFPA symbols an essential tool for his consultants. "A quick view of the electronic diagram provides the underwriter with an overall presentation of the location and the key features that help identify construction aspects that will affect the insurance rate," he says.

The diagram helps the underwriters see what a building's exposures are, which saves time and helps to analyze a property's risks.

Before adopting the software, Union Insurance prepared paper diagrams. Paper-based drawings took time to process since they first had to be scanned. Legibility and quality fluctuated. Now, with an electronic drawing program, the drawings are technically consistent.

The consultants can place symbols. draw walls or indicate distances in between buildings or fire hydrants and other special exposures. Changes are color-coded and notes can be included at the bottom of the diagram. The result is that client properties are now easier to read. "Let's say you have a building and you visit it two years later," says Hernandez. "With the electronic drawing program, an old diagram can be instantly pulled up and revised."

Diagrams typically require updating about every two years. "Now, I don't have to redraw the whole diagram," adds Hernandez, "so that saves tremendous lime." The amount of time saved using an electronic drawing program means it's ultimately cheaper to produce.

"Where we save money," says Hernandez, "is by eliminating processing steps by using the Insurance Zone diagramming program. It's easy to use, and we're all consistent now." Union Standard consultants can now draw an entire diagram, then e-mail it with their report to the company's main office where it is processed immediately.