Allianz Global Corporate & Specialty (AGCS), one of the leading
insurers in the world has analysed the challenges of assessing and managing the
risks associated with ‘supertall’ buildings in its latest risk bulletin.
As the insurer of some of the tallest buildings around the world,
including the construction of Australia’s Q1 on the Gold Coast, AGCS in its
latest Supertall Buildings Risk Bulletin examines the increasing trend of
extremely tall buildings and the challenges it presents to insurance companies,
with some of them rising a kilometre high.
This year, for instance has seen the 100th ‘supertall’ building being
built in the world, rising over 300 metres high. More than half of the world’s
tallest buildings have been built in the last four years, with the high rise boom
in Asia and Middle East accounting for 90% of all recent supertall projects. With
values often exceeding $1 billion, the latest supertall or ‘megatall’ (600+
metres) buildings including the 1km high Kingdom Tower development in Jeddah, pose
new challenges for insurers.
By 2020, the average total height of the tallest 20 buildings in the
world is expected to be close to 600 metres, comparable to almost two Eiffel
Towers, and made possible by a combination of new technologies, innovative
building materials and creative design elements.
Ronan Gallagher, Regional Manager Engineering at AGCS Asia Pacific observes
that insurance plays a vital role in evaluating and managing the complex risks
of these extraordinary projects. He explains that one of the biggest challenges
of supertall buildings is associated with safety with many materials being used
at the limits of their performance capability.
Significant risks also include pumping and placing concrete at extreme
heights, safety issues and fire risk throughout the construction phase. Claims
and risk consulting services are therefore, particularly important on a
construction site, with close evaluation of past claims essential in preventing
Projects in the supertall category present unique challenges for
insurers as well as for architects and contractors. These developments are
inherently highly complex as they can involve thousands of workers and over 100
subcontractors. Most of these projects can easily exceed the $1 billion mark,
plus a similar amount to cover delays in completion of the project due to
material damage events. Insurance for a complete project is, therefore
generally provided by a consortium of insurers and reinsurers who collectively
are able to cover a total loss of the project.
For the Kingdom Tower project in Jeddah, AGCS is the leading reinsurer
of this building, which has an insured value of US$1.5 billion. AGCS also
provides speciality coverage for construction defects, termed Inherent Defects
Insurance (IDI), which provides cover for damage arising from defects in
design, materials or workmanship that were not discovered during construction.