21 Aug New data-first approach to mass timber insurance

We speak to Philip Callow, founder of Rosetta Risk Management (RRM), a new MGA that has been set up to specialise in mass timber insurance.

“RRM is an ‘insurtech’ start-up,” says Philip Callow, RRM Founder & CEO. “It is leveraging technology for a better outcome for mass timber insurance.”

Acquiring insurance for timber construction can be challenging – so any pro-timber developments in the insurance world will be of interest to TDUK members. And RRM have backing from serious players.

RRM has raised money from a business called Howden Ventures, which has been created as part of Dual International – one of the world’s largest MGA (Managing General Agent) platforms. Dual is, in turn, part of the Howden group of companies, a global insurance broker and insurance company.

“Dual International/Howden Ventures is funding our technological advancement, and they now have new insurance capacity ready to be deployed only for mass timber construction through their venture MGA,” Philip reveals.

What is an MGA?
You would be forgiven for not knowing what a Managing General Agent is. In layman’s terms, Philip explains, the MGA is the agent who acts on behalf of one or more insurers.

“Those insurers delegate their authority to DUAL as a Managing General Agent, which gives DUAL permission to sell insurance policies on their behalf. In effect, we have a ‘box’ – the delegated underwriting authority (DUA). If the risk, the policy dynamics and parameters fall within that box, they can bind the insurance policy.”

Leveraging tech for a data-first approach
RRM’s focus is on mass timber. At the moment its remit is exclusively on construction-phase insurance, although Philip anticipates expanding into property insurance as well – first-year operational property insurance at the very least. Not for nothing do they describe themselves as ‘insurtech’: the ‘tech’ is an important part of RRM’s USP.

“Through our proprietary software, RRMTech, we are leveraging the data that architects, engineers, contractors, subcontractors are using during the design and construction phases, and then, once the building’s completed, data from building owners and operators,” he says. “The AEC community is using technologies of various kinds to deliver a project – and they are using those technologies because they reduce risk and improve productivity. They deliver a return on investment.”

“That investment return is intrinsically linked to underwriting, The technology that the project uses should make a material difference to the insurance transaction. We are creating a virtuous circle between these parties and the data the technology is both using and creating. We think it makes a material difference to the availability and the equitability of the insurance policy – a fair reflection of the risk that is being underwritten.”

Risk management
Philip is co-author of the Mass Timber Insurance Playbook, published in 2023. It is essential reading, helping stakeholders in the construction and insurance industries to understand each other’s priorities and language – overcoming gaps in understanding that can hold back mass timber construction.

Underwriters will ask questions about how risk will be managed in the project. A project might be intending to use technology at its core through the implementation of BIM, for example. Or it might use reality capture during construction, not only to better manage the workflow of subcontractors but also to help track progress.

Various smart systems might be being used for a number of reasons, such as moisture monitoring. Its also true that compliance with the Golden Tread legislation provides a unique opportunity to leverage the data being recorded to help satisfy insurers concerns around the use of mass timber.

“This has a positive ancillary benefit for insurance purposes. A number of our developer contacts have started to use particular systems to create a “golden thread” record of their buildings. That is really important from an insurance point of view, because it is often said that there is a lack of data in mass timber – which makes it harder for insurance providers to price the risk.”

Rewarding good behaviour
What RRM is looking to do is to reward useage of tools and systems that foster a better way of working, a better quality of workmanship, or a better management of risk on site. Essentially, best practice is being rewarded. Philip also points out that the insurer can also help the insured parties to manage their risk better, via risk surveying.

“The lead insurer might send an engineer on to the construction site and, certainly on larger projects, this can happen on a regular basis. That’s not just to monitor progress, it’s to impart best practice that those risk engineers have experienced in other areas. There is a huge amount of support that the insurance community can give the engineering and construction community from lessons learned.”

RRM are agnostic when it comes to the specific brand of tech or software a project might use. But Philip acknowledges that there are some that have become industry-standard. “Having an image capture system that can also track and share progress – where the project is against schedule – is really important for insurance. There are several image capture systems out there and a couple of static capture systems, such as Lobster and Evercam.”

“There are six or seven leading project management platforms out there across the European and North American markets. And quite a few moisture sensor solutions out there, alongside a number of companies that provide automatic water monitoring and shut-off valves. We are agnostic, but some are more relevant than others.”

The ‘tech’ in ‘insurtech’ need not refer exclusively to digital software or electronic hardware: protecting material on the worksite can use some very simple technologies. Philip’s message is that insurers across the board are looking for innovative solutions to existing practices that lead to better business. Whether that is customer service, internal efficiencies, or software that monitors progress via image capture from day one – it all manages risk, allowing an understanding of where things might go wrong and prompting change much more quickly.

Interested developers can contact Rosetta Risk Management through their appointed broker. See www.rosettarm.com