Underwriter Allianz measures the heights of mass timber construction risks

The latest installment of the Allianz Commercial Emerging Risk Trend Talk series examines financial and life safety factors surrounding mass timber construction. Authors find a) mass timber assemblies and building methods are relatively new, while testing continues to establish a methodology for determining the performance of structural elements during a fire; b) regulatory frameworks for large mass timber projects are not fully standardized around life safety and property protection provisions; and, c) buildings with combustible elements are at the highest risk of fire during construction, owing to ignition source exposure and incomplete protection measures.

Using Forest Business Network data, “Mass timber – Emerging Risk Trend” assumes purported differences in embodied carbon levels of mass timber versus concrete or steel structural materials. “The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a material that is more cost-efficient but as durable as steel and concrete,” says Allianz Commercial Global Head of Risk Advisory Services Michael Bruch. “However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, and mass timber is no different. Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures in place to combat these.”

Allianz Commercial is tracking mass timber in light of growing construction market acceptance in Europe and North America. Wood Products Council figures indicate just over 2,000 residential, commercial or institutional mass timber projects were in progress or built in the U.S. as of December 2023. The global mass timber construction market reached $857 million in 2021 and is projected to hit $1.5 billion by 2031, according to Allied Market Research.

Posted at https://commercial.allianz.com

Mass timber: Caveat emptor

  • Fire
  • Water damage
  • Termites and insects
  • Natural hazards
  • Manufacturing, transportation and supply chain issues
  • Workmanship issues
  • Cost of repair

Source: Allianz Commercial