Mark Farmer delivers the future of MMC (modern methods of construction) for insurance underwriters and construction companies.
The ascent of MMC “as a whole concept is here to stay”, with the message that insurance underwriters and construction sectors must “get closer together” to “understand the difference between systemic risk versus randomised risk”, according to Mark Farmer.
Speaking at the UK-based ABI (Association of British Insurers) webinar last month, titled Insuring the buildings of today and tomorrow: Adapting to overcome changing risks and future claims, Farmer explained that MMC is “an incremental issue that both construction and the insurance sectors need to get closer together to resolve how we’re going to do this in a way that everyone gets comfortable with, that we don’t create unintended consequences, that the insurers recognise the risk arbitrage of building things better”.
“That’s really the objective here. It’s not building in a different way for the sake of it – it’s to create a better solution,” he added.
At the “heart” of MMC, for example, is the drive to remove randomised and systemic risks from the construction sector.
Farmer said: “This is a really, really important issue to get our heads around and understand what we’re talking about in relation to MMC.
“That inevitability that [MMC] is only to grow as an area of house building means we just need to get that relationship right between the insurance underwriting sector and the construction sector to understand risk and understand the difference between what I call systemic risk versus randomised risk.
“That goes to the heart of what MMC is really trying to do. It’s trying to eliminate randomised risk that we’re seeing on construction sites at the moment, of failure that can’t be predicted because it’s variable and [based on] the labour and the workmanship and the competency and skills of the people involved.
In 2019, Farmer worked with the government and industry bodies to define MMC. This working group broke MMC down into seven different categories:
Category 1: Pre-Manufacturing – 3D primary structural systems, such as off-site modular construction.
Category 2: Pre-Manufacturing – 2D primary structural systems, such as off-site panel construction.
Category 3: Pre-Manufacturing – Non-systemised structural components.
Category 4: Pre-Manufacturing – Additive manufacturing, for example 3D printed components. Although this is not being used in the UK currently, Farmer predicts this will come into fruition over the next five to 10 years.
Category 5: Pre-Manufacturing – Non-structural assemblies and sub-assemblies. Farmer said this is commonly used, but little known about by insurers.
Category 6: Traditional building, product-led site labour reduction/productivity improvements. Farmer noted that this category includes innovations in building methods, such as modular wiring and brick slips – techniques that are designed to reduce the labour required to put materials together.
Category 7: Site process led labour reduction/productivity improvements. This category is around site-based improvements, like the use of robotics.
Mark Farmer is the author of the October 2016 UK Government Review of the Construction Labour Market Model entitled ‘Modernise or Die’, also widely known as ‘The Farmer Review’. Farmer has 33 years of experience in the construction and real estate sectors, and now runs a consultancy specialising in innovative delivery models.
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