Cost trends

Zurich Replacement Value Cost Trends

Real Property * Personal Property

Zurich is committed to providing experience and insights to help customers and producers better understand and prepare for the evolving risks they face over time.  This issue of Zurich's Replacement Value Cost Trends provides the results of the most recent real and personal property inflation survey conducted by Zurich.  The cost trends are published to assist in maintaining proper levels of insurable replacement costs for commercial and industrial properties.  The cost trends are issued bi-annually in January and July.

January 2016 Cost Trends Analysis

The current building construction cost trends show a slight cost increase for the six months ending January 2016 and an average increase of .4% for the year. Smaller projects are showing lower cost increases due to competition. Labor is the main driver in inflation although some material costs also contributed. New technology is being adopted that is increasing efficiency and decreasing costs.

The personal property cost trends indicate overall percentage increases in machinery and equipment costs for the listed plant occupancies. The most recent survey of machinery and equipment costs showed costs remained flat for the last 6 month period.  It is anticipated the rate of increase will be about the same over the next six-month period.

Real Property

Inflation multipliers are provided for all 50 states, Puerto Rico and eight Canadian provinces. In all, cost trends are included for 184 cities. Prior to January 2011, the cost trends are available on a regional basis.

To determine the current replacement cost of a building, select the closest city from Zurich's Replacement Value Cost Trends. Find the date across the top of the page that corresponds to the last time the existing values were updated. Scroll down the page to the closet city and note the multiplier. Multiply the factor provided by the existing estimated replacement cost to arrive at the current estimated replacement cost.

Personal property

The personal property cost trends are calculated by use of a weighted index and include an installation factor.

For personal property, choose the occupancy and scroll down the page to the date closest to when the existing values where last updated or established and note the multiplier. Then apply the appropriate multiplier to the existing personal property values to approximate the current replacement cost.