Munich Re launches construction product
Munich Re and RIB have signed an agreement to jointly develop the first global IT-based insurance product for large construction projects that covers elements of unplanned increase in construction cost.
The solution, targeted at project owners, combines the RIB iTWO Technology with Munich Re’s risk know-how.
Munich Re said that RIB technology will divide the construction process into two phases. During the virtual construction phase, all processes, interfaces, time aspects and costs are made transparent.
This is the basis for the insurance cover, which mitigates risks related to cost and time elements and provides investors with more cost certainty. The physical construction phase starts only after successful completion of the virtual construction phase.
Thomas Wolf, chairman and chief executive officer of RIB Software AG, said: “The core principle of the IT-based solution is to provide a maximum of transparency in the design and execution of construction projects in order to mitigate the risk of an unplanned increase in construction cost.
“In the case of adverse occurrences during the construction phase, it provides financial protection by indemnifying an amount of such cost. It will help governments and investors to manage the risk of cost overruns in future.”
Christoph Hoch, chief underwriting officer engineering, corporate insurance partner, Munich Re, said: “Risk transparency, risk mitigation and risk transfer are key elements for investors in their desire to achieve a high degree of cost certainty for their investments.
“Munich Re’s risk know-how combined with the IT and construction expertise of RIB were the cornerstones for the development of this new solution. We are thus able to offer risk transfer for certain risks that were not previously insurable. We are confident that owners, developers and investors will benefit from this new insurance solution.”
