If you underwrite or broker industrial policies, you need to set a factory's premium with certainty — and know exactly how much it would recover if it burned down tomorrow. An industrial policy is worth whatever its calculation basis is worth, and without an independent technical valuation, someone bears the risk — and it is almost never the insurer.

In your portfolio, the industrial insurance line faces two chronic technical problems: underinsurance — the insured pays an adjusted premium but receives a settlement proportional to the declared value, not the real value — and overinsurance — the client pays a premium above the real replacement cost. Both generate disputes in claims and erode the client-insurer relationship.

Capital Appraisal issues reports with the dual calculation a professional industrial policy requires: RCN (Replacement Cost New) for new-for-old cover and DRV (Depreciated Replacement Value) for real-value cover, with a complete insurable inventory, geo-referenced photography and technical data per asset. The detailed service is documented in Industrial Insurance Valuation. Four of the ten largest European insurers with a presence in Spain accept our reports directly, with no additional documentation.

For corporate risk departments, a valuation ahead of the annual renewal saves premium and reduces litigation. For insurers in underwriting, it sizes the risk before quoting. For claims assessment, urgent cases are handled within 48 hours with a signed report. Periodic update programmes keep the insured values live without full re-valuations.

Related sector Private Equity & M&A — when the industrial policy enters a transaction.

Typical workflows

Three scenarios where an independent valuation is required

Technical input differs depending on the stage of the policy: pre-underwriting, renewal or an open claim. Each workflow has a distinct timeline and set of deliverables.

  1. Pre-underwriting · new policy or increase in capacity

    The broker gets in touch for a new industrial policy or an extension of cover. We inspect the sites, draw up a complete insurable inventory and calculate RCN and DRV per asset. Timeframe: 10-20 days. Deliverable: an inventory + an RCN/DRV table + a geo-referenced photographic report in a format accepted by the insurer.

  2. Annual renewal · RCN/DRV update

    A recurring programme that keeps the insured values aligned with real industrial inflation. It combines physical inspection (20-30% of the asset base per year, rotating) with a desktop update of the rest (based on official indices + secondary market comparables). It drastically reduces the risk of accumulated underinsurance.

  3. Open claim · technical assessment

    48-72 hour urgency. Post-loss inspection, documentation of the condition of the damaged asset, comparison with the pre-loss value (ideally from a prior valuation), calculation of the damage value (partial or total) on the policy basis (RCN or DRV). Defence before the claims committee and, where applicable, in the contradictory assessment.

Sector data

Indicative figures for the industrial insurance market

Typical ranges observed in the Spanish industrial portfolio (mutuals and generalist companies, 2022-2024). Aggregated data.

Average underinsurance detected
25-40%
Replacement cost inflation 22-24
12-20%
RCN vs book value difference
+30-60%
Delivery time · underwriting
10-20 d
Delivery time · claim
48-72 h
Annual renewal coverage
25-30% of base
Full review frequency
3-4 years
Top-10 European insurers
4 / 10
Regulatory framework

Regulation applicable to industrial policies

Law 50/1980 · Insurance Contract Act
The Spanish legal framework for private insurance contracts. It defines the proportional rule (art. 30) — the settlement is reduced in proportion to the underinsurance. An annual technical valuation prevents this penalty in the event of a claim.
Solvency II · Directive 2009/138/EC
The European regulatory framework for the insurance sector. It requires companies to carry out a rigorous assessment of the risk assumed and to hold sufficient technical provisions. The technical quality of the pre-underwriting valuation is a direct input to this calculation.
DGSFP · Directorate-General for Insurance
The Spanish regulator for the sector. It supervises underwriting practices, claims assessment procedures and the solvency of companies. External independent valuations are a recognised and recommended practice.
RICS Red Book · RCN/DRV
The methodological standard that defines the value bases applicable to insurance: Replacement Cost New ("new-for-old" cover) and Depreciated Replacement Value ("real value" cover). Accepted by European insurers with no additional documentation.
ICEA · sector standards
ICEA (Cooperative Research among Insurance Entities) publishes technical guides on insurable valuation. Capital Appraisal follows the ICEA recommendations for specific asset types (machinery, fleets, warehouses).
Representative examples

Three anonymised scenarios

Real cases (anonymised data — the figure, the timeframe and the outcome are verifiable under audit).

Type of engagement Sector Sum insured Underinsurance detected Timeframe Outcome
Pre-underwriting · new policy Food & beverage €8.5M — 14 d Sum insured calibrated to the real RCN
Audit · in-force portfolio Metallurgy €28M 38% 3 weeks Capital renegotiation · future claim saving
Claims assessment Pharmaceutical €2.1M damage — 48 h Settlement agreed with no contradictory assessment

Figures rounded. "Sum insured" = the policy capital corresponding to the inspected perimeter. "Underinsurance detected" = the difference between the declared capital and the real RCN at the time of the audit.

Key benefits

  • Precise insurable value: RCN (Replacement Cost New) for new-for-old cover, DRV (Depreciated Replacement Value) for real value
  • Complete insurable inventory with geo-referenced photography of every asset
  • Elimination of the risk of underinsurance (insufficient cover) and overinsurance (an excessive premium)
  • Drastic reduction of disputes in claims assessment — the pre-loss value is documented
  • Compliance with the technical requirements of European insurers

Who it is for

Insurers and sector-specific mutuals
Industrial insurance brokers and intermediaries
Corporate risk departments
Insurance managers in heavy industry

Need to know the real value of your assets?

Request your valuation. First contact, scope and fees with no obligation, under the RICS Red Book standard.

No obligation · RICS-regulated firm · European coverage