Combustible Construction – Road to Management
Combustible Construction – Road to Management
The Issue – Assets, Properties, Plant
Framingham Wines, a prominent winery in
Marlborough, has achieved a 20% reduction in its
insurance premiums following a comprehensive risk
assessment conducted by Think Consulting. The
winery, which utilised insulated sandwich panels
(ISP) with combustible cores in its building
construction, faced challenges with increased
premiums and reduced coverage due to insurer
concerns regarding the fire risk associated with these
materials.
“We were facing significant challenges in securing
favourable insurance terms due to the perceived risk of our building materials,” said Tom Trolove,
Managing Director of Framingham Wines. “We
needed a solution that would help underwriters
understand our risk profile more accurately and
ultimately save us premium.”
TCL’s Approach to help the Client
Detailed ISP Inventory: The team meticulously
identified and measured all ISP locations,
estimating the percentage coverage of these
materials across the building envelope and total floor area.- Scenario Planning: Think Consulting developed various scenarios for the removal of ISP,
providing Framingham Wines with clear business case options to reduce their risk profile. - Fire Loss Modelling: Utilizing industry standard Probable Maximum Loss (PML) scenarios, the team developed fire scenarios and estimated potential financial losses.
- Monte Carlo Simulation: A Monte Carlo-based
statistical Fire Loss Curve was created,
illustrating the probability and potential financial consequences of fire-related incidents.
Client Outcome & Benefits
- Targeted Risk Mitigation: Framingham Wines
received practical guidance on specific areas of ISP that could be removed to achieve
insurer-acceptable coverage levels. - Enhanced Broker Negotiations: The detailed risk assessment provided strong support for insurance broker negotiations, resulting in improved terms
and pricing. - Demonstrated Low Risk: The analysis effectively demonstrated the low probability of a large-scale fire event, reassuring insurers of the winery’s risk
profile. - Significant Cost Savings: Framingham Wines
achieved a 20% reduction in insurance premiums. - “Think Consulting translated our risk into a
language that the insurance companies could
appreciate,” Trolove added. “An independent risk assessment was a game changer for us. We are delighted with the outcome.”
Prevent 30% of Fires - Switchboard Maintenance
1 in 5 commercial fires are caused by electrical sources, of which 30% of these are due to electrical switchboard failings.
Structuring Risk Management
Reviewed & challenged the Risk Management Framework against ISO 31000 Risk Management Principles.
Better Information Leads to Better Coverage
Physical site visit and discussion with client on occupancy, activities, management programs, maintenance
Quantifying Uncertainty – A Fire Loss Example
Worked with the client to develop potential reinstatement values at risk at a base level for the different configuration of units.