Construction sector in 2018: interview with Marcus Saunders
We recently caught up with Marcus Saunders, one of our construction experts, to talk to about the construction sector, and future initiatives and developments in 2018 and beyond.
To start with, please tell us a bit about you and your experience in the construction sector?
I have over 30 years’ experience working in the sector, advising clients on insurance and risk management. I’ve worked with large construction companies involved in complex projects, as well as house builders, civil engineers, quarrying businesses, tarmacing companies railway contractors – my clients range from typical black top contractors to multi-million businesses.
We’re the approved insurance broker to the Structural Timber Association (STA), how did that relationship come about?
I could see the timber frame industry was a growing area, and it’s a sustainable method of construction which sits well with my personal interest in being as ‘green’ as I can. I had some initial talks with the STA, or the UK Timber Frame Association as it was then.
I spent time visiting members, and talking to them about their individual needs and challenges, and the relationship grew from there. I gained a lot of knowledge and awareness of the timber sector, and started working with them on fire safety and other issues.
STA members have a culture of good practice, and proactively work to reduce risk in the construction process. Through my relationships with insurers, I was able to get insurance companies to recognise that, and discount their insurance premiums accordingly.
I think STA members understood I was a bit different to other brokers, and in turn, the insurance market recognised the benefits of STA membership in creating a culture of effective risk management.
I was invited to visit the head offices of various composite insurers, as they wanted to gain a greater understanding of the timber sector, and that’s when they really understood the differentiators between non-members and STA members.
Proposal forms now typically ask if they have STA membership, if they practice the sixteen steps to comply with STA Fire Safety guidelines, use the Site Safe policy – the STA guidelines are there to mitigate losses and improve safety. This understanding has enabled me to negotiate much better deals for STA members.
Lucas Fettes was awarded STA Assure Level Gold accreditation last year – so how has the relationship with the STA developed?
As time as gone by, they’ve shared their challenges with me, and we’ve responded to those. For example, in the self-build market, there was a need for a product with deposit insurance and also a need for self-build structural warranties. So, for the structural warranty, through the contacts I’ve built up, I was able to complete the jigsaw, so to speak.
Working with the Lucas Fettes team, we were able to develop Protek, a self-build structural warranty operation. We’ve broadened our activity within the sector, to respond to its needs.
I also work with our team in Newport, on private household insurance for timber framed houses as most insurance brokers don’t insure timber framed houses. Householders know we have the expertise within the timber sector and relationships with specialist insurers, so we’re able to arrange competitive home insurance for them.
We can do the whole lifecycle – from the very outset of an idea and the design, to the build to the warranty and insuring the property afterwards. I don’t know of anyone else who’s doing that. And obviously we can insure the architects, the manufacturers, the erectors, everyone involved in the process. We can insure the complete supply chain.
So, you’ve been all over the UK recently, presenting at the Fire Safety Workshops and talking to attendees. What are the key issues for the sector currently?
The change to the Ogden discount rate has had a key impact, so I’ve been discussing that with people. It’s had a big impact on liability limits and claims reserves, so it’s obviously important that people are aware of that. The Grenfell Tower tragedy is also a key issue for the construction sector generally, though less so for the timber sector as cladding isn’t always used and not the type involved in Grenfell.
I’ve been talking mainly about health and safety, because it’s such an important topic. I sit on the STA health and safety committee, and we actively communicate with members. For example, we identified that there was a nail gun problem, which was causing injuries when it hit a knot of word. One of the members developed a solution – it was a ‘Y’ shaped piece of wood – quite simple but very effective in preventing injuries.
I’m able to share real life claims examples with the committee, and then we can all work towards safety solutions and reducing risk. Obviously we don’t share any personal details of claims, but what we do is work proactively to identify areas of risk and prevent future incidents. An unfortunate incident happened recently whilst a contractor was working at height.
We on the committee identified what measures could be taken to prevent this incident happening, so that we can prevent future accidents - next year the STA is producing a quarterly health and safety newsletter which we’ll contribute to. Working together is really beneficial to both ourselves and STA, as we’re helping to mitigate risk and improve safety.
As we begin 2018 what are the key issues for the construction sector?
With the Grenfell Tower tragedy, there’s a greater appreciation of the need for higher standards and health and safety. Obviously Brexit is going to have a huge impact, although I think we’re still unsure exactly how that will affect the sector. We’re seeing a rapid rise in modular building, and housing associations are moving into managing this process themselves – setting up their own factories rather than employing a contactor.
In terms of construction insurance, we’re a member of Constructing Excellence and we’ve been having discussions with them as there’s a real need for Integrated Project Insurance.
This would be insurance for a complete project such as the high speed rail link, and is a real innovation for the construction insurance market, it would involve Collaborative working with the insurers, lawyers, employers , clients and supply chain etc.
Typically on a large, complex construction project you will have multiple contractors all with their own insurance. An integrated Insurance Policy would cover the project as a whole. Together with Construction Excellence, we’re involving people from across the sector and leading insurers to work towards an innovative new solution. It’s a really exciting time for the sector, and for us, so we’re looking forward to this year and beyond.
Marcus Saunders, Lucas Fettes & Partners
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