The contents of this guidance material is intended solely for the purpose of assisting Unimutual personnel in the management of the Unimutual Protection program and providing Members with information in relation to the selection, specification, and use of lower risk construction material in new construction or major refurbishments. The document is current as at February 2022.
The insurance industry has become increasingly “risk selective” over recent years as the market hardens in response to reduced profitability driven by an upswing in the quantum and frequency of claims, particularly natural catastrophe losses along with ongoing traditional fire losses resulting from the past use of flammable construction and insulation materials.
Insurers continue to write “good quality risks” with moderate rate increases, however “poor quality risks” are likely to be subject to significant rate increases, reduction in cover and increases in sub-limits. In certain instances, insurers may have no appetite to underwrite poor quality risks, leaving some with-out insurance and with no alternative but to self-insure.
Property insurers consider a good quality risk to be one that:
- Actively employs Construction Occupancy Protection and Exposure (COPE) risk management principles and processes when assessing property risks
- Mitigates and minimises their exposures so far as reasonably practicable
- Only uses construction materials that are tested to reputable test standards
- Closely manages contracts, contractors, and suppliers
- Designs and delivers highly protected assets
- Considers asset protection not just compliance with NCC requirements
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