Insulated Panel Council Australia EPS An Underwriters Perspective Brisbane 25 Oct Presented by: Toby Salmon Brooklyn Underwriting

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1 Insulated Panel Council Australia EPS An Underwriters Perspective Brisbane 25 Oct 2012 Presented by: Toby Salmon Brooklyn Underwriting

2 What is EPS to an Insurer? Acronym for Expanded Polystyrene foam Sandwich Panel or Insulated Panel system Two metal [aluminium] faces bonded to a core of insulation EPS A system includes:- The panels Their jointing The support structure

wholesaling Seafood co-op s Coldstorage Bakeries

3 Where can we find EPS today Abattoirs / butchering Smallgoods manufacturing Vegetable / Fruit wholesaling Seafood co-op s Coldstorage Bakeries Dairies Poultry operations Pharmaceutical manufacturing Residential homes

Manufactured in Oz 2006 > Some evidence suggests

4 What s not EPS PUR Polyurethane Cheaper insulation material Usually sprayed onto surface Still flammable Thermal degradation ~ 200ºC PIR Polyisocyanurate Commonly referred to as New EPS Manufactured in Oz 2006 > Some evidence suggests superior fire inception performance to traditional EPS

5 The EPS Insurance Market in Australia Reducing Capacity + Increasing Rates 1. Probably fewer than 10 Insurers willing to consider EPS risks- commercial 2. Residential property insurance EPS constructions a virtual unknown as to: 1. Pricing ($) 2. Appetite 3. 50% Rate Increases on renewal not uncommon up to Nat-Cat s and other unrelated property insurance issues affecting the markets appetite to high-hazard classes

- So expect unpredictable Underwriters and increases in prices Co-insured

6 The short-term future for EPS insurance We are yet to see the arrows reverse! - So expect unpredictable Underwriters and increases in prices Co-insured placements more common - Capacity becomes more scarce Kotku Bread Pty Ltd 2010 fire - $2.7 Claim denied by Vero - Broker sued / material non-disclosure

7 EPS The Good Guy

8 EPS The Good Guy Has excellent thermal characteristics for controlled environments e.g. coolstores Provides good hygiene (hence use in food processing) Lightweight and easy to build / work with Water resistant (e.g. Brisbane markets - flood) Offers no nutritional value to pests Relatively inexpensive 100% Recyclable

9 EPS The Bad Guy Tip-Top Bakery

10 EPS The Bad Guy Relatively low flash-point ~ 200 C May contribute to fire-load melts into liquid May induce a fire to spread quickly - ~30m per minute. Produces large amounts of toxic smoke when on fire Can become structurally unstable when exposed to large amounts of heat Because of these qualities, Fire Authorities are unlikely to enter a EPS site ablaze can = Total loss Can be expensive to retrofit with newer products or implement some Risk Improvements (e.g. automatic sprinkler systems

11 An EPS Fire Case Study Primo Smallgoods 8 Oct 2007 Source: Superintendent Chris Jurgeit, Manager, Structural Fire Safety Unit NSWFB

12 Primo Smallgoods Fire 8 Oct 2007 Summary Fire burned for ~ 2 days NSW FB resources = 26 trucks / pumpers + 6 aerial units 350+ people evacuated Major interruption to surrounding businesses Total loss to Greenacre plant - $200m Caused by small electrical fire in vacuum pump

13 Primo Smallgoods Fire 8 Oct 2007 Chain of Events 9.59am Automatic Fire Alarm (thermal) direct call to NSW FB 10.07am Fire crews en route large volume of smoke issuing 10.16am Escalated by FB to 13 th alarm 12.40pm Fire spread to adjoining building Surround and drown strategy Fire burned for ~2 days internally

14 Primo Smallgoods - Photos

15 Primo Smallgoods The culprit A = Vent through EPS Panel B = EPS core

17 FF accessed fire by cutting through exterior A = EPS panelling and 3m roof void Fire undetectable

18 Primo Smallgoods Fire 8 Oct 2007 Outcomes / Lessons Learned Early warning systems work! Fire Brigade familarisation crucial Risk Management plans (housekeeping + electricals) Cut-out panels can improve FF efforts PIR rebuild at Greenacre site Contingency plans and BI costs

19 EPS The accomplices Remember..EPS will not start a fire on its own it needs an ignition source Source: Munich Re

20 How can We improve EPS risks? There are inexpensive AND expensive ways to improve EPS risks and Risk Management is the key! Cheap and easy -High standard of general housekeeping - Clear idle pallet storage away from EPS panels - Hotwork permits and controls Moderate costs -Annual thermographic testing of electricals - Installation of Auto-fire alarms (smoke / thermal) Expensive -Automatic Sprinkler Systems - Retrofit old EPS with newer product

21 How can We improve EPS risks? Thermographic scanning

22 Green EPS The future? InsulLiving An initiative by Bondor Australia / BlueScope Steel Quicker, Leaner, Smarter, Greener the next step to zero energy housing 34% Faster build time than traditional methods. Reduced reliance on trades. A single panel combines framing, load bearing, insulation and internal/external wall linings in one product. Increase Energy Efficiency and Ongoing Savings with an 8-Star Energy Rating. Source: Bondor Australia, Media Release, 23/8/11

23 Green EPS Source: Bondor Australia, InsulLiving. com.au

24 Residential Home EPS Related Fire

25 Summary & Questions EPS is a complex character and often misunderstood. Can be good and bad but does not act alone There is a lot of EPS out there and new products coming to market EPS, on balance, is a Good Guy, and its use in Australia likely to increase Expect a tough market for EPS insurance, with high premiums and few insurers Education of Insurers is the key!

TIP TOP BAKERY FIRE, FAIRFIELD PIA NO 011/02

Post Incident Summary Report TIP TOP BAKERY FIRE, FAIRFIELD PIA NO 011/02 Incident: Address: Council: Tip Top Bakery Fire 311 The Horsley Drive, Fairfield Fairfield City Council Date of Incident: 2 June