MASS TIMBER INSURANCE: A STOCK TAKE
Joe Giddings, Projects & Campaigns Director at the Alliance for Sustainable Building Products (ASBP) new Timber Accelerator Hub, explains how some of the complexities surrounding timber and insurance can be addressed.
Despite its many well-known advantages in terms of carbon, waste, speed and quality of construction, mass timber faces multiple challenges that are preventing it being adopted as the primary structural material for most medium and high-rise commercial and residential developments.
Unfavorable changes to regulation have combined with high costs or lack of availability of insurance. With widely held doubts and misconceptions around fire performance persisting amongst insurers, many developers are reluctantly reverting back to concrete or steel – so what’s the solution?
The Timber Accelerator Hub (TAH) was launched earlier this year by the Alliance for Sustainable Building Products (ASBP), in partnership with the Laudes Foundation, to help develop solutions to these complex challenges alongside timber industry partners including Swedish Wood & Timber Development UK.
The TAH’s steering group brings together expertise from insurance, fire engineering, cost consultancy and sustainability, and couples this with timber industry knowledge. This collaborative approach is the starting point to developing initiatives to not only increase the uptake of mass timber but do this in a way that helps improve building safety and durability.
I was brought in as Projects and Campaigns Director for the TAH in April, drawing upon my experience from establishing another collaborative network, the Architects Climate Action Network (ACAN). Since April we’ve been building connections and developing a number of working groups in order to scope out the issue from different perspectives. We’ve been speaking to developers, brokers, insurers and architects amongst 01 others to understand exactly what the problems are and to begin to address them.
Insurance providers’ reluctance to provide cover rests upon the relative lack of data in terms of premiums and claims specific to mass timber buildings. Data from the 1,000 or so mass timber buildings that have been completed in the UK exists in silos within different insurance companies, with no obvious solution as to how to pool this. One broker pointed out that: “insurers’ data is their intellectual property – their datasets are what gives them the edge over competitors”. Set this against the backdrop of a ‘hardening’ insurance market in recent years, where the cost and availability of insurance has been increasing across the board, and construction materials such as CLT, DLT, glulam and LVL begin to look unattractive for insurance providers, leading to huge hikes in premiums or cover being removed completely over a certain threshold, as the risk appetite of insurers decreases.
Chase Underwriting International have responded to this situation with the announcement of a UK Mass Timber Construction Insurance Facility, which will fill the gap in the UK construction insurance market with a viable policy that matches the needs of developers wanting to utilise mass timber products in their projects. Through the facility, commercial projects between £10-60million in value can be covered, supported by multiple insurers each taking on just a small slice of the risk, with Chase Underwriting managing that spread of risk.
Chase’s facility is a smart solution that patches over part of the problem, and we encourage interested clients, developers and contractors to get in touch to learn more. Construction insurance is however only half the picture. Beyond this, a further challenge awaits the UK property insurance market. Amongst property insurers there is clearly a need for an increase in understanding regarding the performance of mass timber structures when exposed to fire and water during their lifetimes, as well as a need to pool any existing claims data on the UK’s existing mass timber buildings. Together with Dominic Lion, a broker at AJG, we’re convening a forum to communicate the latest in fire engineering, testing and best practice to a large group of the UK’s leading property insurers, to assuage doubts, provide reassurance, and address concerns. We have a number of sessions planned for the coming months which we hope will begin to turn the tide in property insurance for mass timber buildings.
Ideas abound for longer term systemic solutions: from the achievable aim of mass timber specific regulation to more imaginative solutions such as a structural timber ‘captive’ insurer (an association of large developers providing coverage for themselves to allow for greater flexibility) and even a Government-backed reinsurer. We’ll be looking to other countries such as France, Austria and Canada to understand how policy instruments can support the adoption of mass timber, and we’re closely watching the development of innovative concepts such as Waugh Thistleton’s ‘new model home’.
There’s a lot of work being undertaken right now by proponents of mass timber in the UK to demonstrate its safety, sustainability, quality and performance. Our role at the TAH is to bring this together to unlock the use of mass timber in construction. If you’d like to contribute your thoughts, we’d be delighted to hear from you.
You can contact Joe Giddings at: joe@asbp.org.uk
For more information on Chase Underwriting International’s UK Mass Timber Construction Insurance Facility contact Philip Callow at: Philip.Callow@chaseunderwriting.co.uk or Brad Green at: Brad.Green@chaseunderwriting.co.uk
