Now is a boom-time for super-tall buildings. In the last seven years, the number of buildings towering above 300m have almost tripled and engineers are pushing higher, with work well advanced on the world’s first 1km-high building.
Such heights require immense engineering and construction expertise, but their complexity also creates a strong need for another sort of expertise – risk management and insurance, with insured values now often surpassing $US1 billion.
Most growth in building heights is being driven by Asia and the Middle East, home of current titleholder of world’s tallest building. According to Allianz Global Corporate and Specialty (AGCS), more than half of the world’s tallest 100 buildings have sprung up in the past four years alone, with 90% of them in Asia and the Middle East. This trend should continue, with 10 of the top 20 buildings in 2020 expected to be in China.
The usual risks faced by any large construction project are exacerbated by the scope of the buildings, as well as construction practices in some parts of Asia and the Middle East. As with any modern high-rise construction, fire is the primary foe.
This risk is worsened by factors such as a lack of automatic fire detection systems, the absence of which can make locating a fire on a building with scores or even hundreds of floors a formidable challenge. The sheer height of super-tall buildings also presents fire-fighting problems, with fire crews often struggling to access the upper levels of the buildings. The height can also mean traditional fire hoses lack enough
water pressure to be effective.
The current title-holder for the tallest building is the Burj Khalifa. Officially opened in 2010, it soars 828m over Dubai in the United Arab Emirates and is home to more than 1000 apartments.
Written by local insurer Oman Insurance and reinsured internationally, the policy that covered the six-year construction period was worth $US1.5 billion, covering construction risks, workers compensation, liability and professional indemnity.
The height can also mean traditional fire hoses lack enough water pressure to be effective.
Munich Re was the lead reinsurer on the project and provided extensive risk management services. It helped to ensure there were no major losses during construction, with water damage during sprinkler system pressurisation the worst of it.
The builders of the Kingdom Tower will be hoping for similar success. Expected to be completed in 2018, the Jeddah, Saudi Arabia project is set to stand at least 1000m tall and according to lead reinsurer AGCS, has a current total insured value of $US1.5 billion.
AGCS Senior Risk Consultant Clive Trencher says the sheer scope of the project means all involved will have to be prepared to face the unexpected challenges that come with pushing limits.
“Such constructions are unique projects facing unique risks,” he says. “While we may learn some techniques from the construction of other tall buildings, it would be wrong to assume that they can be fully risk-assessed or planned just because they have been used on similar tall structures.”