Choosing the right construction materials can make the difference

Concrete and steel are the two most commonly used building materials globally. In this article we look at what insurers consider and look for in construction projects when it comes to the use of these two construction materials.

Steel and concrete are both building materials that can boast multiple advantages over each other, as well as other materials used in construction, like wood, for example. Equally, both materials have their weak points. Therefore, choosing the right material, as well as optimising the building design and protection systems prior to any real-world construction taking place, is critical from an insurer’s perspective if they are to commit to insuring a client’s infrastructure project across its entire operational lifecycle. 

Pekka Miettinen photo.
Pekka Miettinen, Chairman of the CAR/EAR Competence Centre at If Insurance

Knowledge sharing 

Pekka Miettinen is Chairman of the CAR/EAR Competence Centre at If Insurance. Begins Miettinen, “At the centre, our purpose is to spread knowledge about construction, and CAR (construction all risks) and EAR (erection all risks) insurance in general projects. The centre has representatives from four Nordic countries, and expertise from different lines of business, including from property, liability, cargo, claims and risk management.

It’s important that we have a variety of different competencies with different professional backgrounds, so we can collectively bring a broad range of expertise to the table when meeting with clients and stakeholders, as well as share experiences that we have had. We cannot underestimate the influence that claims have on our experiences. To that end, we carefully look at what kind of claims are handled at If, so that the next time we will be able to mitigate the risk in the underwriting side and in the risk management side.” 

Contrary to popular belief, concrete is still being used in construction projects just as much now as has been the case historically, and while the images of innovative, aesthetically pleasing, ultra-modern looking steel and glass skyscrapers have tended to suggest a trend towards a greater share of steel being utilised in modern construction projects across the last two decades, this has not been reflected in reality. 

Traditionally, construction projects use concrete, and high-rise buildings have contained lower layers of concrete with steel used in the higher layers. A building does not need to be that high before the weight benefits of steel begin to kick in. Steel remains a heavy material but is around 60% lighter than concrete. 

It’s important that we have a variety of different competencies with different professional backgrounds.

Pekka Miettinen

Comparing properties

While steel can boast a weight advantage, and is a strong, durable, and flexible material, it has some disadvantages too. Says Miettinen, “When you compare the properties of these two materials, concrete has better compression properties compared to steel. You need to increase the dimensions of the steel structures to prevent the buckling phenomenon when building high rise buildings. Often the core tower, which contains elevators and stairs are also made from concrete. Furthermore, the floor is usually cast with concrete. Effectively, using steel helps reduce the amount of concrete being used.”

construction workers at construction site.

Concrete is viewed as a reliable material, due primarily to the fire risk and temperature changes that can impact steel structures. Steel more easily loses its ability during a fire to bear the weight above it in a structure. Steel therefore needs to be protected separately and that comes with some additional cost. Concrete is highly fire resistant and does not easily lose its ability to bear the weight of the structure above it.  

However, concrete can contain steel in the shape of rebars, and especially in horizontal concrete constructions these are fairly exposed to heat due to their placement on the bottom section of the construction to absorb pulling forces. Spalling can therefore often be a significant problem and will expose the steel, compromising the concrete. Steel can be packed in insulating boards or can utilise intumescent paint. 

Managing the risks 

In addition to concrete and steel, plastic-based materials, like expanded plastic insulation, continue to be frequently used in construction projects.  From a risk management perspective some reservations about the use of plastics in steel and concrete structures exist, as certain kinds of plastics can be challenging.  

States Miettinen, “This is what we do now with existing properties our clients have. We give recommendations in how they would need to change these buildings, so they are an insurable risk and help them to mitigate the risks they have in their operations. If new projects are being built, it would be much more beneficial for us and the client if we can get involved earlier than currently has been the case. This way we can express our views of the designs and offer comments if we do not deem the risk acceptable, such as in the use of certain plastics or the steel structure itself.” 

In the early stage of projects If Insurance is mostly concerned, regarding materials and protection systems, with the building process itself, the organisation implementing it and their experience in undertaking projects. These criteria have a significant influence on all phases of the project. It also has an influence on what materials are used in the finished building. By visiting a construction site, Risk Engineers at If can easily see if the project is a well-managed project or not. 

Considering the environment 

From an environmental perspective, with current production methods there is not that much difference between steels manufactured globally, however more environmentally friendly metals will be produced in the near future. Green steel is one current and viable solution, though it still requires mining and transportation. On the concrete side, green concrete for example, is used by incorporating green fuels in lime kilns. Green concrete also uses a significant amount of waste material to replace the use of materials harvested from quarries.  

That said, concrete is a more flexible material in the lower levels of buildings, especially when you have structures at ground level. Here, the form and design are easier to implement with concrete than with steel structures. 

Notes Miettinen, “The Swedish company SSAB, for example, has been able to produce carbon-free steel, but its more expensive of course. From our point of view, the risks are not so much market driven risks, but are rather concerned with the production itself. Some companies are also advertising that instead of using fossil-derived oils to coat the steel plates, they are using renewable and sustainable bio-based oils derived from plants.  

Every project is different

If Insurance is also a big insurer of the heavy industries, as well as in new construction projects involving green energy and renewable energy, especially in the Nordics.

If’s experts are aware that when something new arrives, like an enhanced technological prototype is developed to produce steel, for example, the company must carefully analyse what kind of risks it brings with it. 

Construction worker mounting iron.

Adds Miettinen, “Every material has pros and cons, and selecting construction materials for a project will depend on the total package, including for example, actions taken to mitigate the potential risks of these materials.  We need to also follow what is happening in the world and to understand that on a greater scale that new metal and steel structure production methods will be developed, and these are capable of being environmentally more friendly.

As an insurance company we need to follow that trend and be more involved in the process to support this transition as well. At If, we work together with our clients to find the optimal solution for their project. This work is not limited to the current insurance cover the client has, rather, we take a holistic approach.” 

Protection systems 

At the Competence Centre, Risk Engineers have a critical role to play, and the two issues discussed the most with clients are firstly the choice of the material and secondly, the active protection systems. In this work the focus is mostly on the project aspects, so recommendations mainly concern the operational phase of the building. That has an influence on the lifecycle of the building and will bring benefits to both the client and If Insurance alike.  

“When it comes to claims and incidents that we have helped our clients with over recent years,” says Miettinen, “I don’t believe construction materials themselves contribute that much to the number of claims, at least if we talk about concrete and steel building projects. Once the building is completed and protections systems are installed, the key is to secure and protect operations in the structure.

The building itself is a shelter for the operations, which is a very passive thing, and at that stage it doesn’t matter if it is concrete or steel, as long as it is properly protected in a way that enables the production or operation to happen in the correct way.  

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Construction worker climbing to the roof.

Regardless of which material is used, when it comes to operational risks, you need to take care that the operations done in the structure – whether it is a factory, logistics centre or shopping centre – do not jeopardise the stability of the building itself.

Whatever happens, there should be passive and active protection systems, like sprinkler systems that are purposely designed for protecting bearing structures. Naturally, companies must have procedures in place to mitigate the possible losses in a building after an incident.” 

As with any building or structure, it must be maintained and taken care of throughout its lifetime. The complexity of the building will determine how much maintanence it will require over its operational lifetime.  

Evolving future landscapes 

If’s CAR/EAR Competence Centre offers expertise and support to clients to help them find the right solution for their projects. To ensure If’s experts are able to support companies correctly, it is important that the company is involved in the early stages of the project. This gives everyone better capabilities to influence the design of the structure from a material, as well as a risk management and insurance perspective.  

Concludes Miettinen, “In this world of increasing inflation, global supply and demand challenges, and high raw material costs, we will begin to see more cases where investors will seek to save on costs, and it is important in these situations to avoid opting for cheaper materials or leaving out the installation of active protection systems, for example.

These types of cost-cutting measures can ultimately lead to difficulties in securing insurance. By working together with our CAR/EAR competence centre and risk engineers we can mitigate the risks in your next project.”  

Written by

Dan Rider