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Tue March 02 2021

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Allianz sets out risks of ‘supertall’ towers

25 Jun 14 This year sees the construction of the world’s 100th ‘supertall’ building and engineering insurer Allianz Global Corporate & Specialty (AGCS) has produced an analysis of the challenges of building even higher towers.

how the world's tallest towers have grown (click to enlarge)
how the world's tallest towers have grown (click to enlarge)

With values often exceeding US$1bn (£588m), the latest ‘supertall’ (300m-plus) or ‘megatall’ (600m-plus) buildings pose new challenges for insurers as well as for architects and contractors. says AGCS. Concepts for the first mile-high (1.6km) building already exist. However, they are unlikely to materialize for at least another 20 years – largely due to the fact that elevator technology is lagging behind building technology.

More than half of world’s tallest buildings have been built in last four years, with the total supertall category almost tripling in the last seven years, says the report. The high rise boom in Asia and Middle East leads the way, accounting for 90% of recent supertall projects.

AGCS is the reinsurer, or insurer, of a number of the tallest buildings around the world, including the next to hold the title of ‘world’s tallest’, the 1km high Kingdom Tower development in Jeddah.

The latest Supertall Buildings Risk Bulletin says that growth of the world’s tallest buildings continues to accelerate in the 21st century as demonstrated by Dubai’s 828m-high Burj Khalifa, towering more than 300 meters over the previous highest building, Taiwan’s Taipei 101 (509 meters). As soon as 2019, these will in turn be dwarfed by Kingdom Tower which will be the first 1-kilometre tall building, ensuring the size of the tallest building in the world will have doubled in just 10 years.

By 2020, the average total height of the tallest 20 buildings in the world is expected to be close to 600m, comparable to almost two Eiffel Towers, made possible by a combination of new technologies, innovative building materials and creative design elements.

Alongside the continuous race for record heights, a strong geographical construction shift east is taking place. Throughout the 20th century the US skyscraper dominance was undisputed but the vast majority of construction projects today are in China, South East Asia and the Middle East. Dubai alone is already home to 20% of the world’s tallest 50 buildings, while China boasts 30 of the tallest 100 buildings across 15 cities. Indeed, this month China announced initial plans for its own 1km-tall building, the Phoenix Towers.

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“The eastward trend is set to stay, driven by rapid economic and demographic growth, urbanization, strong investor appetite for flagship real estate assets and lower labor costs than in the traditional Western markets,“ said Ahmet Batmaz, global head of engineering risk consulting at AGCS.

Current technology limits elevator travel in today’s supertall and megatall buildings to around 600m, mainly due to challenges with braking and cabling, although this is expected to change in future. Other limiting factors include the availability of building materials to potentially replace steel and concrete, but also safety measures for occupants and surrounding areas, damping systems to reduce the negative impact from wind or seismic activity, as well as financing such mega projects.

“The foundations of a supertall or megatall building need to be strong enough to even withstand an earthquake or other natural catastrophe activity,” said Clive Trencher, senior risk consultant at AGCS. “In the initial building phase particularly, consideration also has to be given to potential exposures such as flash flooding, as there will be large excavations that could get filled with water.

“Significant technical issues to overcome include pumping and placing concrete at extreme heights, maintaining verticality as the building height increases, fire risk and even water and sewage disposal.”

Ground-breaking projects also bring challenging risks for insurers. The projects are inherently highly complex, as they can involve up to 10,000 workers and over 100 subcontractors each. All project phases – whether building construction or civil engineering – can be insured, said AGCS. The extraordinary size and value of today’s largest buildings can easily exceed the US$1bn mark and so insurance for the complete project is generally granted by a consortium of (re)insurers. In the case of the Kingdom Tower, AGCS is the leading reinsurer of this building which has an insured value of US$1.5bn. Insurers such as AGCS also provide after-construction coverage for protection against damages arising from defects in design, materials or workmanship. “Insurance plays a vital role in evaluating and managing the complex risks of these extraordinary projects. Claims and risk consulting services are particularly important on a construction site with close evaluation of past claims often essential in preventing future claims,” says Batmaz.

The AGCS Supertall buildings risk bulletin can be downloaded from http://www.agcs.allianz.com/assets/PDFs/risk%20bulletins/Supertall-Buildings-Bulletin.pdf(opens in new tab).

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