Many Australian businesses may be underinsured. Outdated valuations, inaccurate asset data and volatile market conditions can leave organisations exposed to significant financial risk in the event of loss. In a preliminary review of 12 major organisations, Lockton identified that more than 50% were underinsured - highlighting a broader market risk.
Our Insurance Valuations team provides accurate, defensible valuations for buildings, contents, plant and equipment. In an inflationary environment, where material and labour costs continue to rise, regular valuations are critical to ensuring adequate cover and reducing financial exposure at claim time.
Insurance Valuations - Buildings: Independent reinstatement valuations that determine the full replacement cost of buildings, including demolition and debris removal, professional fees, planning approvals, cost escalation and appropriate reinstatement periods.
Insurance Valuations - Contents, Plant and Equipment: Detailed replacement cost assessments reflecting current market conditions, foreign exchange impacts, capital expenditure movements and asset configuration - ensuring declared values accurately reflect reinstatement requirements.
Financial Reporting and Fair Value Assessments: Independent fair value and accounting valuations aligned to financial reporting requirements, considering depreciation, market trends and asset condition. Suitable for financial statements, M&A activity and strategic capital planning.
Ongoing Insurance Value Reviews: Cost-effective annual updates incorporating indexation, FX fluctuations, capital expenditure adjustments, asset disposals and event surge pricing - ensuring values remain current between full revaluations.
Why partner with us?
Independent and defensible advice: Accurate, professionally prepared valuations aligned to insurer expectations and policy wording.
Protection against underinsurance and co-insurance penalties: Reduce exposure to average clause impacts and claim shortfalls.
Stronger governance and stakeholder protection: Support directors’ responsibilities and demonstrate prudent risk management.
Improved claims certainty and recovery outcomes: Clear reinstatement values support faster, less disputed claim settlements.
Integrated risk insight: Access to broader Risk Consulting capabilities, including catastrophe modelling, risk engineering and business interruption strategy.
National presence, global capability: Local expertise backed by Lockton’s global connectivity.
Lockton’s Valuations team delivered a clear and defensible reinstatement assessment across our energy assets. Their work strengthened our renewal position and gave our Board confidence that our sums insured accurately reflect today’s cost environment.
CFO, Renewable Energy Operator, Australia
Insurance Valuations FAQs
What is an Insurance Valuation?
An insurance valuation is a professional assessment of the reinstatement value of your assets. This process helps ensure that your insurance coverage accurately reflects the current cost to reinstate your property, equipment, and other assets.
What are the main factors contributing to underinsurance?
Many businesses unknowingly leave themselves exposed to financial risk due to:
Infrequent valuations – asset values are not regularly reviewed. Reliance on outdated financial data, including: Depreciation schedules, Fixed asset registers, Valuations from past acquisitions. Fluctuations in foreign-sourced equipment costs, impacting replacement value. Exclusion of off-balance sheet assets, such as those under
hire, lease, or loan agreements. Rising costs of labour and commodity-based products, affecting rebuild or replacement expenses. Global trade tariffs, which can increase import costs and
impact insurance coverage.
Why are Insurance Valuations important?
There is often a discrepancy between the nominated values an organisation declares (which impacts the sum insured and sub-limits) and the correct insurable value of assets.
Why care about declaring the correct insurable value?
For example, in a high inflation climate, the costs of building materials and labour can increase significantly.
Regular valuations account for these inflationary items, helping to ensure that the increased costs of materials
and labour are reflected in your coverage. Regular valuations help you declare accurate insured values, so you
can identify if you are underinsured or overinsured.
With a global footprint of 150+ offices and partner offices, find one near you.
