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XACTIMATE PUBLISHES 2014 PRICING CHANGES

August 4, 2014

A summary of price changes reported in this update is as follows (this percent change is based on the national averages that have been reported since the July 2014 price list publication and from August 2013 to August 2014):

July to August August 2013 to August 2014
U.S. Canada U.S. Canada
30-yr. Laminated Shingle Labor and Material 0.70% 0.33% 4.96% 3.49%
Roofing Material Composite 0.42% -3.82% 0.14% -4.85%
Common Labor and Material 0.17% 0.02% 2.38% 2.05%
Common Lumber Material 1.12% -1.09% -3.34% -1.36%
Common Material Only 0.06% -0.04% 0.50% 2.07%
Retail Labor Rates 0.27% 0.43% 2.85% 3.90%

Pricing research for the August 2014 publication, when compared to July 2014, shows the Labor and Material report, which measures common material and labor used in claims and remodeling, increased slightly in the United States and Canada. The same is true of the 30-year Laminated Shingle Labor and Material report and the Retail Labor Rates report. The Common Lumber Material report, Roofing Material Composite report, and the Common Material Only report showed an increase in the United States and a decrease in Canada.

The information reported here is based on a national average, and it is important to note that actual changes will vary within each individual pricing market. It is also important to remember Xactware’s published pricing information is based on recently completed surveys and estimate transactions.

Changes to installation yields and time assumptions

As a reporter of market-specific pricing information, Xactware’s Pricing Data Services is constantly collecting, reviewing, and improving pricing data. We have initiated a year-long project to review the labor productivity assumptions for line items in each category. We will research and review both the installation yields and the time assumptions for the labor supporting events used to create each line item. As a result of this research, various labor yields and labor supporting event assumptions will be updated over the next year.

It is anticipated that these changes will not have a significant effect on the line item pricing. Part of the process may include adjustments in retail labor rates as we are comparing labor productivity, labor supporting events, and current line item pricing.

Green item definition adjustments

Extensive changes were made to the green item definitions. Xactware determines which line items in Xactware-published price lists are considered environmentally friendly or “green” by using the Leadership in Energy and Environmental Design (LEED) programs; specifically, the Building Design and Construction (BD+C) program focuses on commercial construction while LEED for Homes program focuses on residential construction.

LEED recently upgraded the BD+C program to what is commonly called LEED v4. This update made extensive changes to the material section and rating requirements — including restrictions to Volatile Organic Compound (VOC) threshold limits, to third-party testing and certification, and to other areas that tighten the rating requirement for building products.

Due to these changes in an industry standard, Xactware adjusted the existing green definitions and removed the definitions from line items that are no longer considered to be green.

The new definitions show most of the LEED program rating categories and are broken down into commercial and residential rating types. Single definitions, those not broken down into commercial and residential, pertain to both rating systems and include the same categories in both.

Local market conditions

Xactware makes every effort to ensure pricing information contained in this update represents market costs at the time of publication. Since actual market prices can vary and change rapidly, and since many factors can affect the cost of a project (including — but not limited to — labor, equipment, and material costs as well as the rates and application of sales tax), we strongly recommend customers monitor their local markets for any such changes and adjust their estimate pricing as deemed appropriate.

Gasoline prices in the U.S. and Canada

Since the July 2014 publication, gasoline prices have decreased 4.45 percent in the United States and 6.66 percent in Canada. When compared to August 2013, gasoline prices have decreased 2.93 percent in the United States and 0.68 percent in Canada. Because gasoline prices can change rapidly, Xactware recommends users monitor their local costs to determine whether repair or construction costs have been affected. For further details, see the U.S. Department of Energy website.

Comparative prices (national averages) for the last month are as follows:

U.S. Canada*
June 30 July 28 June 24 July 29
Gasoline National Average $3.704 $3.539 $1.412 $1.318

* Canada prices are per liter

Contents Update

Since the last price list update, the XactContents pricing team has continued to improve the master item list in both the United States and Canada.

Contents
Total Vendors  94
 Canada Vendors  12
 General Quote Items  5,752
U.S. Master Item List Items  13,904,080
Canada Master Item List Items  1,302,883
Retired Items  432,744

Changes to the August price list

Customers can view specific changes to the price lists by logging on to the eService Center. XactAnalysis customers can see specific changes by viewing the Price List Changes report in the Industry Trend Reports section. This same report can be found in the Featured Highlights section of the eService Center.

Pricing feedback

Pricing feedback is one of the ways Xactware ensures that the cost information reported reflects actual market prices. Estimates written outside program work can return feedback by regularly running the feedback utility within Xactimate, XactRemodel, or XactPRM. To run the feedback utility:

  1. Click Services in the menu bar of the Control Center tab.
  2. Select Feedback and then click Yes.

This will process and package information from all estimates that have not previously been collected. Your feedback information will be sent to Xactware the next time you connect to XactAnalysis.

You can submit pricing feedback online or via email to Xactware’s pricing team at:

Downloading a price list in Xactimate

If you are a registered Xactimate user, you can download price lists in four steps:

  1. In Xactimate, Click Price List tab in the main dashboard,
  2. Click Request Price List(s) on the menu bar.
  3. From the “Request Price List” window, enter the country, state or province, city, and profile for the price list you would like to download.
  4. After making your selections, click Download.
  5. A window will appear advising you the price lists have been downloaded and are now available for use in Xactimate. Click OK.

FLORIDA PROPERTY ISURER FLORIDA NATIONAL INSURANCE COMPANY EXPANDS AND DIVERSIFIES

Florida National Insurance Company  set to floats $40 Million IPO To Expand Operations And To Fund New Florida Carrier, Monarch National Insurance Co

August 4, 2014

Federated National Holding Co., a Florida-based property/casualty insurer, announced that it has priced an underwritten public offering of 2,051,283 shares of its common stock at a price to the public of $19.50 per share for gross proceeds of $40.0 million.

The company said the net proceeds from the sale of shares, after deducting the underwriters’ discounts and other expenses, will be approximately $37.4 million.

The company said it has also granted the underwriters a 30-day option to purchase up to an additional 307,692 shares of common stock offered in the public offering to cover over-allotments, if any.

The company said it will use the net proceeds from the sale for general working capital purposes, including as statutory capital in support of the company’s growth and to sustain its capital levels after its investment in a new Florida homeowners insurance company, Monarch, that it is forming.

The company announced  earlier this week that it was joining with the Canadian bank and investment manager C.A. Bancorp Inc. to form a new Florida-based homeowners insurance carrier to be named Monarch National Insurance Co. Each party is putting up $14 million in the new venture, while Transatlantic Reinsurance Co. will have a minority position with a $5 million investment.

The closing of the IPO is subject to market and other conditions. The offering is expected to close on August 6, 2014.

Raymond James is serving as book-running manager, and William Blair and Janney Montgomery Scott are acting as co-managers.


 

2014 LEGISLATIVE PROPERTY INSURANCE OVERVIEW

July 2, 2014

The following are some, but not all of the legislative initiatives considered, passed or rejected by the Legislature:

Citizens Property Insurance Corp.- In addition to banning new multi-peril policies for condos and apartment buildings, SB 1672 limits the ability of public adjusters to receive referral fees as well as their ability to accept power of attorney from policyholders, and calls for all Citizens bid disputes to be handled in administrative court, rather than by its board. Lawmakers also passed HB 1079, which delays the ban on Citizens’ coverage of construction projects within the coastal construction line for one year, pushing the effective date back to July 1, 2015.

Florida Hurricane Catastrophe Fund- The two competing visions for changes to the Cat Fund remained in stalemate this year. Bills (HB 391, SB 482) to reduce the total coverage of the fund, which acts as the state-backed reinsurance fund for Florida-based insurers, from $17 billion to $14 billion over three years fell flat, as did a bill (SB 228) to lower the retention level, or deductible, in the Cat Fund. Smaller Florida domestic insurers favored the latter approach which would have allowed them to draw down Cat Fund coverage for claims in a smaller size storm. Larger companies favored the reduction in the Cat Fund, which would have pushed other companies to purchase more reinsurance in the private market at higher prices.

Florida Insurance Guaranty Association- Bills that would have allowed FIGA, which pays out the claims of insurance companies that go bankrupt, to pass assessments directly to consumers failed to make it through the Legislature.

Property Insurance Rates and Regulation- SB 708 bans the practice of post-claims credit checks used by insurers to deny claims and allows claims-seekers to be informed of their rights in the process. But the Legislature did not pass provisions which put restrictions on the “assignment of benefits” – the signing over of future claims payments to contractors in emergency situations, a practice insurers say is being abused.

Umpires- SB 708 instills ethical requirements on all participants of the appraisal process, and has language which could be interpreted to restrict the PA and IA from being on an appraisal/umpire panel.  Specific definitions and engineering qualifications were added for Sinkhole claims.

©Saul Cimbler and Florida Mediation LLC 2014.  All Rights Reserved


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