The UAE’s updated Fire and Life Safety Code was designed to reduce the threat of major fires in high-rise buildings in the country, a risk that has prompted reinsurers to tighten terms and conditions for providing cover over residential and commercial property.
The revised Code, which took effect in January, has new regulations on cladding panels to ensure that their flammability is as close to zero as possible.
Cladding which covers the exterior of high-rises has been blamed for a number of fires across the UAE in recent years, including the highly publicised blaze at the Address Downtown Hotel in Dubai on New Year’s Eve in 2015.
The regulations lay down new procedures for the installation of cladding. The panelling used in new buildings must meet high safety standards. The revised Code also stipulates that the owners of buildings that catch fire will be required to replace all exterior cladding, not just the panels affected by the fire.
Dubai Civil Defence officials have also said that research is being conducted for existing buildings, and there will be a timeline for the maintenance and retrofitting for all buildings, reported The National.
Independent third-party inspections will be integral to compliance to the Code, experts said.
For the first time, the Code sets out penalties for non-compliance, including fines.
The authorities tried to phase out combustible cladding in new buildings with the 2012 Fire and Life Safety Code, but concerns persist about buildings completed before 2012.
In a briefing issued in January before the revised Code took effect, A.M. Best said that during the recent reinsurance renewals, some major reinsurers stipulated that local insurers in the GCC must retain a minimum of 30% of risks following a large number of fires in high-rise, skyscraper buildings in the Middle East.
Given that the common net retention levels were at 5% or lower on high-value risks, the rating agency considers this to be a significant development for the market if implemented.
“During the renewal period leading up to 1 January 2017, reinsurers have responded to the recent fire losses by further tightening terms and conditions, and adjusting commission rates for residential and commercial property risks. Most insurers have been under pressure to accept quota-share treaties with higher retention mainly as a result of weak performance stemming from poor risk selection,” said Mr Mahesh Mistry, Senior Director of analytics at A.M. Best.