Are our tall buildings simply going to become uninsurable?
Long ago, at a City Forum meeting last autumn, chastened by the recent destruction of the World Trade Centre, a gathering of the great and the good met to decide what effect the event would have on the future of tall buildings. After some learned presentations and a discussion, the participants decided that no conclusion could be reached beyond the fact that two diametrically opposed opinions held sway. Half the participants were inclined to support the prediction of former City planning chairman Michael Cassidy who, while admitting there had been a severe shock to the property sector in the City, felt that after a few weeks, the whole thing would be forgotten and the restless call for tall buildings would resume as strongly as before.
The other half of the participants supported the gloomier view of military historian Sir John Keegan, who argued that when the shock waves had subsided it would become clear that the events of 11 September had passed a long-term death sentence upon skyscrapers everywhere. And not only skyscrapers but, in the specific case of London, the riparian buildings along the Thames which were as good a target in 2001 as they had proved to be in the Blitz of 1940.
Cassidy, the optimist in this contest, disagreed. He based his point of view on the short-lived effect of the two IRA bombs that exploded in the City in the 1990s.The occupants of the NatWest tower (which was damaged by both bombs), had been alarmed for only a short time. In the days immediately after the explosions, he noted, they had been nervous, especially when on the upper floors. But within a month or two, things were back to normal and, when the building was refurbished and let shortly afterwards, there had been no shortage of tenants.
Keegan, the pessimist, conceded this point but went on to compare the scale of damage in each event, with neither City bomb approaching the scale of the damage or the death toll of 11 September. This, he said, would have its greatest long-term effect in the form of insurance claims.Tall buildings, he insisted, were now by definition more prominent and more at risk than anonymous low-rise structures. If there were more suicide attacks, not only would nobody be prepared to work in tall buildings, but they would simply become uninsurable.
Today, nearly six months after that meeting, it is interesting to look at how the two predictions have fared.Up to the time of writing, there have been no more terrorist outrages on the scale of the World Trade Centre, which must have gratified both parties.
At the same time, there has been a return of enthusiasm for highrise office buildings with 15 to 20 proposals for towers current in central London alone, and others proposed for provincial cities, which would tend to suggest that Michael Cassidy's short memory theory had merit. On the other hand, an opposing factor has also born out Keegan's prediction.
Widening the net to include projects in the EC, Asia and the US, there is evidence of a growing insurance problem for high-rise buildings, just as Keegan foresaw. Broadly speaking, since 11 September anti-terrorist insurance has no longer been a part of property insurance but a risk subject to reinsurance that has to be negotiated separately. This process is already threatening the value of some famous buildings in the US and in other countries. A notable case in point is the sale of Helmut Jahn's Frankfurt Messeturm, the second tallest building in Germany, which was held up for months before an exceedingly high premium policy was negotiated with a specially formed consortium of reinsurers.