Damage to Constructions Insurance Certification System

1
Damage to Constructions Insurance Certification
System
August 2008
2
Topics

• Why
• Reliability in Civil Engineering Framework
• Purpose
• Needs
• Objecives
• Approaches
• Concept
• Regulatory Framework
• Operation
• Oversight

3
why

• The civil society is getting more and more
  demanding on the results. We need to define the
  results of our products and services in advance.
  We must reduced the damage costs in construction
  activities.
• Science and Technology are aware or the risk
  involved in their products. We need to relate
  ourselves with the risk .
• The responsibilities juridical definition is
  getting confusing a lot. We need to attend the
  responsibility in our activities. Responsibility
  makes us do it.
• The image of our products and services is the
  base of the future bussines. The price is
  important, but also their our image based in good
  results.
• If we need adjust engineering activities
  reliability we must introduce a system based in
  risk management, with damage insurance police. In
  several countries this warranties are
  obligatories.
• The insurances and reinsurances companies need to
  know the real risk in a projects and they impose
  Technical Inspection Services (TIS) with
  independent and knowledge in risk management.

4
Reliability in Civil Engineering Framework

• From 19th century, this system had been applied
  in the navy sector.
• From 1990, the new technical codes (EUD 106/89)
  in Europe impose the reliability level in the
  projects.
• Several countries (France, Texas, Spain,
  Portugal, Sweden, etc.) impose a warranty system
  with insurance police from the developer. More
  ever, in France this system is obligatory under
  penal responsibility.
• Another countries use the insurance system in the
  voluntary way. The European Commission (GAIPEC
  report in 1985) recommend that.
• The nominal failure probability of inherent
  defaults in the structures get the 0,14 in 10
  years. The real more than 0,55. We must advance
  in that more over if we expose lives.
• The real reliability in construction activities
  is about 6 of the construction cost. We need to
  reduce it.
• The technological innovation needs risk
  management in each project.

5
What is TIS (Technical Inspection Services)?

• Multidisciplinary teams, independent from the
  rest of intervening legal agents, with knowledge
  and experience in technical risk management.
• We try to adjust and to establish the risk level
  in the projects. We collaborate with the legal
  agents in the prevention activities and all,
  together, get the normal risk (no possible zero
  risk).
• We give this activity for an important set of
  developers (public and private), motivated by the
  quality problematic, the image, the
  responsibility and/or competition.
• The insurance companies demand their presence
  when they are financing the risks for different
  constructions.
• We are the evolution of quality control. Today
  the quality of a project is to get the normal or
  the minimmun risk with the optimize cost. This
  included the possibility to financial this risk.
• We collaborate with the established system to
  recognize the reliability of the products,
  equipments and systems.

6
How does TIS work?

• Define and analyse the technical risks that
  supposes a buildings work, within the limits of
  its mission (the minimum demanded by the
  insurance company, installations, etc.)

• It compromises to detect several common and/or
  disproportionate general risks.
• Specific analysis made by professional
  technicians in technical risks.
• Collaborates with the intervening legal agents
  on how to identify the risks and on how to take
  care of them (minimize, eliminate or establish
  control parameters).

Cost Costconstruction
Costmaintenance
RISKPROB X COST FAILURE
Costdemolish
7
How does TIS work?

• Audits the processes, with the purpose to
  evaluate the logistics of the project quality
  and/or the execution and avoid the modification
  of the risk parameters.
• Guarantees the process documentation, in a way
  that makes possible the interpretation of what
  happened and the future establishment of the
  responsibilities.
• Archives the technical works documentation.
• Simplify the forensic intervention that are going
  to evaluate the damages.

8
Why TIS? Why a regulation from WCCE?

• The construction market needs this speciality
  (Technical Inspection Services) because the
  reliability must be adjusted.
• How this activity needs to be recognized from
  reinsurance companies to facilitate the
  warranties. The reinsurance and insurance
  companies ask for a social and private system to
  agree this companies and their resources.
• Each country has some particular aspects but the
  technical and the system are similar. The
  universal system to recognize this companies
  could have a general system and each country
  could apply the model but under the same system.
  This is like Standard and Poors in the financial
  market.
• The WCCE could be the manager of the system. The
  office of WCCE in each country could manger the
  system under a general committee. The
  posibilities of profits to WCCE are important
  18.000 for the first audit and the 2 of the
  market (more or less 0,25 of the construction
  cost) must be pay from this companies to control
  of their activities. In Spain the market was 160
  mns/ year and to the control could be 3mns/year.

9
Purpose

• Establish a Certification system for the review
  of resilency and potential to damages fo
  structures for Insurance purposes
• Framework for an accreditation system
• Oversight and compliance

10
Needs

• Independent review for insurance of structures
• Reduction of risks
• Compliance with Life-Cycle management of
  structures

11
Objectives

• Regulate the activities of risk assessment and
  management of structures
• Oversight of structures Certification
• Establish compliance guidelines for life-cycle
  review

12
Approaches

• Government Accreditation
• Recognition by the Insurance Industry
• Peer-reviewed Accreditation

13
Concept

• International Organization under the WCCE
  auspices
• Establish a Certification system for
• Organizations
• Individuals
• Professional Associations
• Oversight and peer review

14
Regulatory Framework

• Organization
• Experience professional development
• Equipment and technical capabilities
• Established
• Methodologies
• Internal Controls
• Continued education
• Capabilities to deal with innovative structures
• Independence of actions

15
Operation

• Central Operations
• Consideration for the Practice
• By Country
• By Region
• Data bank
• Professionals
• Organizations
• Completed certifications synopsis

16
Oversight

• Independent review
• Random review of Certifications
• Review of Internal Controls
• Compliance with
• Procedures
• Reporting
• Administration
• Workload assignent
• Ethics