Risk management (and linked to that, mitigation) is increasingly becoming an area of concern for all stakeholders in the insurance industry -brokers, insurers, reinsurers and policy holders are all affected by the degree to which risk is managed in their businesses. A hot topic (excuse the incoming pun) of contention is that of fire risk and the steps needed to efficiently address the issue in industry. Last week we spent the morning with two of our partners, ASIB and Econorisk, as they discussed fire risk management and the challenges they are facing in their respective businesses.
That is the international standard for how long it should take for a fire department to respond to a fire. Unfortunately though there are factors that impact this response time and in South Africa it is often a lot longer before a fire department is on the scene. One advantage that some countries have is the plumbing (of the sprinkler system) is piped directly into the fire station in certain areas, and with the pressure being monitored, firefighters can respond to a fire in a building before it is even reported.
While 8 minutes may seem like a relatively short period for a response time, it is drastically accelerated when you calculate in that a fire doubles in size in 80 seconds. Quick maths shows us that the fire could be at least six times the initial size before the fire department arrives.
It is great to see Econorisk, a group of leading independent risk and short-term insurance advisors, taking a proactive step with regards to managing the risks associated with fire. As a broker, they want to ensure that they are providing the best advice and service to their clients. By hosting and engaging with ASIB at their offices, it highlights the importance of working with assessors and regulatory bodies. As the latest issue of the FIA Insights magazine highlights, collaboration is key.
In September last year we published a blog about “The importance of being regular – why maintenance is important”. We highlighted the below fact about regulation relating to building inspections.
“According to SABS 0287 – a building should be inspected every 13 weeks or 4 times year. A quick calculation shows that even if you assume there are at least 10,000 protected buildings in the country, that would result in 40,000 inspections a year. ASIB can carry out roughly 5,500 inspections year – the country simply does not have the required amount of qualified personnel to meet the regulation and inspections are not enforced.”
While there are many issues facing the fire and insurance industries at present, ASIB remains committed to ensuring best practices are adopted and followed in installing sprinkler systems around the country.
Not only do fires cause catastrophic damage to property and business operations, but when lives are lost it is often due to negligence. The insurance industry as a whole needs to assist in addressing some of these issues.
With the Notre Dame Cathedral fire all over the news on Monday evening, a devasting loss of historical architecture, it was a reminder about how quickly fire can spread.
The Orange Grove Diary Fire, is a recent South African example of the devasting effect a fire can have on a business.
We have featured various articles on our CN&CO blog where the ASIB team provide insight into fire, risk management, assessments and proper maintenance. You can find them all here.
Risk management needs continuous assessment and improvements, we all have a role to play in driving this. In the insurance industry, brokers, insurers and assessors need to work together to lessen the exposure that their clients have to fire risks. We can all be far more proactive, rather than reactive.