When the first modern buildings were designed and constructed some hundred years ago, natural catastrophes were considered 1-in-100 year events and therefore were not factored into designs.
In the last twenty years of construction, we have seen some of the largest, costliest and deadliest disasters of our time including the 2011 Tōhoku earthquake and tsunami which cost an estimated US$360bn and killed over 15,000 people.
Disaster resilience has become a buzzword in the construction industry as architects, builders, governments and regulators grapple with how to construct buildings to withstand the likes of Hurricane Katrina, Tōhoku earthquake or the 2004 Boxing Day tsunami which devastated large part of Asia.
Earthquakes: A deep-dive into new construction methodology
Earthquakes occur along fault lines in the Earth’s crust with little or no warning, meaning businesses which are operating on or near a fault line are always on edge, waiting for the next strike. Whilst business operators are generally aware these impending shocks will have massive ramifications on their business operations, it is a new wave of earthquake-resistant construction designs with which are having a real impact on the way modern buildings are constructed.
Standing at 1,667 feet tall, Taipei 101 was the tallest building in the world when it was completed in 2004. Despite no longer retaining the tallest title, the tower is still an engineering marvel of weather-resistant construction. Taipei 101 houses some of the most impressive seismic- and weather-resistant technologies ever designed. Inside this enormous structure is a massive internal damper to control swaying and minimise the possibility of structural damage or failure in the event of a high-wind weather event. The goal of dampers such as this isn’t to prevent swaying in general, but to instead attempt to control this movement as it occurs.
Taipai’s tuned mass damper weighs 728 tons and is suspended between the 87th and 92nd floors. During an earthquake or high winds, the pendulum counteracts the building’s movements. In 2005, during Typhoon Soudelor, Taipei 101 was blitzed with winds of 100 miles per hour and a reported gust of 145mph; above its predicted maximum withstandable force of 135mph.
Standing more than 2,000 feet high, the Shanghai Tower is the second tallest building on the planet and is located not only in one of the most seismically-active areas on Earth but also on extremely soft, clay soil. When working on the project, engineers worked to boost the foundation and make it more of an earthquake proof building by driving 980 piles — some nearly 300 feet deep — into the nearly 2.15 million cubic feet of reinforced concrete.
Like Taipei 101, the Shanghai Tower uses a 1,000 tons highly-tuned mass damper to control the sway of the structure during a high-wind event. also utilizes a tuned mass damper to control sway during an earthquake or high winds. For optimal counterbalancing, a series of shock absorbers also keep the pendulum from swinging too far or too quickly.
Following the catastrophic 1995 Great Hanshin earthquake, or Kobe earthquake is it more commonly known, in which 6,000 people died and more than 30,000 were injured, Japan mandated new engineering standards for construction and sweeping retrofitting overhauls to prevent similar devastation in the future.
Mori Tower, one of Tokyo’s tallest buildings, was designed to be a ‘city to escape to not from’ and thus, the construction of the tower is one of the most impressive engineering feats in modern construction.
Like Taipai 101, Mori Tower uses damper echnology to create seismic resilience, however, rather than implementing a massive tuned damper Mori Tower uses 192 of fluid-filled shock absorbers. These semi-active dampers are filled with a thick oil, and as the tower begins to sway, due to an earthquake tremor or high winds, as a result of tremor or high winds, the oil sloshes in the opposite direction to counter the movement of the building and minimise swaying, resulting in little or no structural damage.
Parametric risk transfer tools – the future of construction risk management?
Parametric insurance products will play a crucial role in helping businesses deal with natural catastrophe risk, according to Jan Mumenthaler, Principal Insurance Officer at International Finance Corporation.
Natural catastrophe exposure should be front of mind for c-suites, risk managers, and insurance companies right now, Mumenthaler says, and parties should think about how parametric insurance can help.
Parametric insurance, which utilises data analytics, is one of the newest tools available to companies in high-risk weather zones. The product does not indemnify full loss but instead pays out a set amount when a catastrophic event reaches a certain threshold, such as a certain amount of rainfall or an earthquake of a particular magnitude.
The insurance product is viewed as a more affordable option for buyers looking for natural catastrophe protection. Rather than covering replacement to damaged assets using loss adjusters, it delivers funds quickly to the insured following an event.
Mumenthaler believes the new technology is part of the “future of insurance”, and can help companies and insurers handle risk more effectively.
“For me, the most fundamental difference is we’re away from this principle of indemnity. So we’re not seeking coverage for replacement of damage assets anymore, but providing instead of that, liquidity which is not directly linked to the damage anymore, but to the occurrence of an event.”
He believes it can remove some of the frustration suffered by claimants. “It is a whole lot faster compared to the old style approach where you have to find a surveyor that has time to go out to visit the site, and gives a lengthy assessment of the actual financial damage.”
While the new technology offers a solution for risk managers, Mumenthaler believes the adoption of parametric insurance needs to be assessed in detail. Relying on a set threshold for payment on a claim could leave companies open to risk, he said.
“There could actually be an event which has a significant impact on a company and its operations, but it wouldn’t necessarily trigger the coverage because the event did not have the necessary magnitude of force. So that creates a certain fear that there is no coverage for an event that’s happened. On the other side, there may be a payout when there really has not been any impact to the operation,” he added.
He said risk managers need to “get their head around” parametric products before switching away from conventional insurance. “I think it requires a whole lot more preparedness to structure the transaction correctly, but also to be prepared in the aftermath,” he added.