Mass timber in the USA – part 2

Q&A with Jake Concannon, Vice President of Gallagher Global

In the second part of our Q&A with Gallagher Global’s Vice President, Jake Concannon, we learn more about how the insurance sector perceives structural timber solutions and its role in the American construction market.

There is tight legislation in the UK on how high timber buildings can be built. Do you have similar restrictions in the United States?

Yes we do, but they vary from state to state. Right now, 18 storeys is the cap and we’re working with some clients who are building to that size. With that said, the majority of timber buildings are under five storeys. For the most part, these buildings are either housing or office complexes, but across the board they’re becoming more popular in recent years.

The UK doesn’t have a great heritage of working with timber, which countries do you see as leaders in the field?

When it comes to mass timber it’s got to be Austria. I’d also highlight Australia, which has been doing some cool stuff in the last few years. Here in the United States, it’s definitely the North West that’s leading the way. Some countries, such as Canada have been using mass timber for 20 years, but even there the insurance market has changed in recent times. Just two years ago colleagues in Canada had no problem getting insurance, but that’s not the case anymore. I often wonder why we’re unable to get data from countries like Switzerland, Austria and Germany, where these systems have been in use for a while and use it to support our own arguments.

Is climate change not a factor in driving more wide scale adoption of timber frame buildings in the United States?

I think it is, but you’ve also got to realise that within the United States there are a lot of different opinions around that subject. There is a significant proportion of the population who don’t believe that climate change is real and maintain the climate has always been changing. For these people, it doesn’t matter what we do because they don’t believe the science. Equally, there are a lot of people who simply don’t care about the subject and aren’t going to embrace new solutions regardless of how beneficial they might be.

With that said, the United States is now implementing new environmental, social and corporate governance (ESG) standards for businesses to follow. So, I think as some of the larger companies start working towards meeting these ESG goals it might inspire a broader change. That’s probably the most likely way for a shift in thinking to occur and benefits from not requiring us to persuade individuals on this highly contentious issue.

How do you see the future relationship between the timber construction industry and insurance sector progressing?

Right now, the push is all about the tech side, with technology being designed to help offset any risks. For example, sensors can be put into buildings during the construction process, which can detect smoke, fire and water moisture content in the air. Nowadays, insurers are asking for a lot of security provisions on wooden buildings because of the risk of arson, so there’s a big technology push in that direction.

I feel much more confident about mass timber solutions, which I think will get the proper support from insurance providers soon. It actually reminds me a lot of the solar market in the post-recession era. Around that time, solar and renewable energy became big and there was a lot of money invested into it, alongside a lot of tax credits. A lot of our contractor clients quickly jumped into installing and building solar panels. It took time to navigate, but eventually people got really comfortable with the technologies.

In general, the insurance sector is wary of new technologies. As such, it’s going to take some years for the timber sector to get there, but with time it will. It’s a good sign that some of our biggest clients are investing heavily into this, including Google. When you have the support of truly smart companies like this it puts the onus on insurance companies to explain why they’re so against it. In that argument, most people will choose to side with these leading firms who have a track record of being ahead of the crowd and right on important issues.

For more information about Gallagher Global, please visit: https://www.ajg.com

To read the first part of this Q&A with Jake Concannon, please click here.