The IT based strategy is meant to help to better gauge the risks related to construction projects.
Munich Re is combining its experience with risk with the iTWO Technology from RIB in order to develop the first insurance technology in the world that is designed to be used as an IT based product for large construction projects.
It is meant to cover unexpected rises in the construction costs of large-scale projects.
The two companies have now entered into an insurance technology exclusive agreement that is meant to allow them to jointly develop this new and unique product. It will be geared toward the project owners, themselves. This, according to a statement that Munich Re has recently released. That insurer also went on to cite a number of different global studies that suggested the importance of protection against unanticipated rises in construction costs.
This insurance technology could help projects to protect themselves against an increased cost of 20 to 30 percent.
According to the studies that were cited by Munich Re, that is the average increase that is experienced in construction projects. The company explained that “Investors fear the uncertainties related to a large number of inherent construction risks: insufficient planning may have a material impact on costs and deadlines during the construction process.”
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That said, at the same time, it could be that through the use of the tech from RIB, the risks associated with rising construction costs could be considerably reduced. The IT technology from RIB breaks the construction process down into two individual phases. The first is the virtual phase and the second is the physical one. Within the virtual phase, all of the various aspects related to time, costs, interfaces and processes are made to be transparent. The physical construction phase will be permitted to begin only once the virtual phase has been successfully completed.
The reason, said Munich Re, is that the virtual construction element of this insurance technology provides the insurer with the foundation information for providing the coverage. This allows risks to be mitigated with regards to both time and cost elements and offers the investors, themselves, with a greater amount of certainty with regards to what the final price tag will actually be.