The engineers of resilience

From a warming planet to exploding devices, FM’s risk experts aim to stay ‘ahead of the game’ 

By Bernice Han

Australia routinely performs well in an annual global resilience index compiled by FM, the US-based commercial property insurer that has a significant presence here.

This year, the country placed 13th out of 130 economies. In the Asia-Pacific region, it was outperformed only by fifth-ranked Singapore – a city state with less than one-third of Australia’s population.

Assessed across 18 benchmarks comprising 12 macro and six physical factors, Australia scored 89.7 points out of 100.

Still, there’s no room for complacency. Not when the risk landscape is constantly shifting and threats are becoming more severe – the obvious example being climate change and extreme weather.

Australian businesses also face dangers that lurk more in the shadows, such as lithium-ion battery fires.

Climate risk exposure is one of the six physical benchmarks used in the FM resilience index, and Australia placed 106th, with a score of 66.8 points, on this measure.

Michael Hunneyball, chief engineer for FM’s Australian operations, says climate change is “probably dominating” conversations on the risks facing businesses here.

With the 2022 floods and 2019-20 Black Summer bushfires still fresh in the minds of many, it’s not hard to understand why.

“These extreme weather events are really becoming the new normal when it comes to risks,” Mr Hunneyball tells Insurance News. “These events are causing lots of damage to businesses, causing lots of disruption.”

But he notes climate fears have encouraged a “very proactive” mindset around natural disaster resilience.

“Because we’ve got a history of natural catastrophes, there is a lot of focus in the building codes and standards, certainly around cyclones.

“We’ve learnt lessons over the years. I think as a country, we do pretty well, but there’s always more that can be done.

“We have to think about what’s happening in the future, what risks we’re going to see again and again.

“We’ve got teams looking at emerging risks globally, and so we’re always trying to stay ahead of the game.”

At FM, getting an early understanding of the risk landscape extends to learning from every client’s loss experience.

“We’ll send a claims adjuster to the client. We’ll also send an engineer there whose job is to understand what caused that loss and what needs doing or what could have been done to prevent it from happening,” Mr Hunneyball says.

“The information our engineers get, it feeds into our property loss prevention data sheets and our advice to clients. It’s a core part of what we do.” The insurer has a list of FM-approved products – including building materials, flood mitigation products and fire protection equipment – for clients to consider using.

“We want to make sure that when clients are choosing to look at risk mitigation, they can purchase products that we know have been tested to a high standard and are reliable,” Mr Hunneyball says.

“It’s really important to know what’s available and to know what’s going to work.

“This is something that we invest in … a testing process where manufacturers can provide that equipment or building product and we test it to a specific standard that we’ve developed, and then we know this equipment is going to do its job.”

A critical part of Mr Hunneyball’s job is devising “tailored and practical” advice for FM commercial property clients.

At present, one focus area is lithium-ion batteries. Use of the rechargeable batteries has increased rapidly, as has the fire risk.

“We can see that there’s a lot of benefits with lithium-ion battery technology … we’re also very cognisant of the risks lithium-ion batteries can pose,” Mr Hunneyball says.

“So we work very closely with clients who are looking at installing these batteries.”

Ideally, lithium-ion batteries should be stored away from critical infrastructure. If that’s impossible, there are other ways for clients to mitigate the threats – measures such as equipment space separation, installing fire-resistant barriers between batteries, investing in water-based sprinkler systems and having battery enclosures made of non-combustible materials.

In addition to online monitoring, early-intervention thermal runaway prevention is another way to minimise the risk of explosions.

“We’ve done research on this for many years,” Mr Hunneyball says. “Back in 2013, we started doing fire testing around lithium-ion batteries and the storage of those batteries, and that progressed through to doing testing of energy storage systems.”

FM’s team in Australia has also been helping clients with cladding-linked fire risks.

Mr Hunneyball says the industry and governments have “really honed” in on the flammable cladding issue after the 2014 fire at Melbourne’s Lacrosse building and London’s Grenfell Tower disaster in 2017.

While challenges remain, he says the issue “is certainly heading in the right direction in Australia. There’s now a lot more products available that are less combustible, which is really good to see.”

No matter what risk is involved, mitigation advice is an important part of every client conversation, according to FM.

“We take a very focused approach because no client site is the same, so it’s very tailored advice that we provide,” Mr Hunneyball says.

“We want them to be able to see our advice as practical ways to mitigate the risk.”

Something new every day at the ‘cutting edge of risk’

Michael Hunneyball began his career with FM in 2007, starting as a plan review engineer with the insurer in Britain.

He moved to Australia in 2010, holding various engineering roles before taking his current position as operations chief engineer in October 2021, based in Melbourne.

“The thing that excites me is I’m always at the cutting edge of risk,” he tells Insurance News. “Every day I learn something new and every day I get the opportunity to help a client mitigate risk. That’s what I really like about my job.”

Mr Hunneyball is responsible for the technical quality of loss prevention engineering services provided to clients across Australia and New Zealand.

This includes development of pragmatic risk mitigation measures and implementation of corporate initiatives focused on loss prevention engineering.

“FM has a whole team of researchers, a whole team of subject matter experts … so we’re best placed to understand risks and come up with something that’s practical.”