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20 July 2024

Some buildings too combustible to be insured: UAE insurance firms

By Majorie van Leijen

The UAE had seen a spate of high-rise fires last year. Often, the combustibility of the material used by contractors contributed to a rapid spread of the fire and consequently, to more damage.

“As an insurance company, Zurich is witness to the devastating consequences of fires caused by highly combustible materials.

The severity of these incidents is magnified when high-rise buildings have combustible exterior cladding systems that allow for rapid vertical fires that race up the facade spreading fire to subsequent floors, overtaxing installed sprinklers and out of reach of the firefighters’ hose streams from the ground below,” says Dean Pola, Senior Risk Engineer at Zurich Insurance Middle East. 
Omer Hassan Al Alamin has chaired the Insurance Business Group, Dubai for the past eight years. “There is a growing concern among insurance companies and international reinsurance companies about the fire safety in buildings in the UAE,” he acknowledges. 
As the Director of Orient Insurance Group, which is responsible for the insurance policy for the recently blazed Tamweel Tower in Jumeirah Lakes Towers, he confirms that this concern leads companies to reconsider insurance policies. 
Insurance companies do everything to minimise the risks. As such, they act as educators, consultants, and inspectors in addition to carrying out the risk assessment required for the issuance of an insurance policy. However, sometimes insurance companies just have to say ‘no’.

“As an insurance company we have to make sure that safety measures are applied,” tells Hermann Frankfurth, Senior Risk Consulting Manager at AXA Insurance (Gulf), the company that insured the fire-struck Saif al Belhasa in Tecom and Al Baker Tower in Al Tawuun area, Sharjah.

“We start our risk assessment through a survey, and in the assessment we take all factors in consideration. But sometimes we do say no, roughly to 20-30% of the risks presented to us.”

However, we do not just say no,” he continues. “We discuss what can be done to improve the situation. We recommend what measures can be taken, even after completion of the building. There could be ways/means to improve fire safety even after a building is done, or at least to minimize a loss.”

Dean agrees. “At Zurich, we’re committed to improving education and awareness related to building design and construction to help mitigate the risk of fire and other dangers. Our risk engineers advise architects, engineers, developers and construction companies about the dangers of non-combustible materials for insulations and facades.

“We also continually educate building owners and their tenants about the need for adequate building or home contents insurance to cover them in the event of a fire or another disaster.

When asked to insure a building that has been constructed with highly combustible materials, the insurance company has three options after having carried out a risk and cost beneficial analysis, he explains.
“We will insist that the highly combustible building materials are replaced with proven non-combustible alternatives, or we will recommend the installation of other fire prevention measures, such as the installation of thermal barriers over the combustible materials to ensure adequate automatic fire sprinkler protection, which could include the option of an exterior facade sprinkler protection for combustible facades.

“In severe circumstances, when property owners refuse to replace combustible materials or install our recommended fire prevention installations, we may decline to insure the building. As part of our underwriting principals, we will not insure properties that we knowingly believe are a danger to their occupants.”


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