An Actuary, a Civil Engineer and a Software Developer Walked into a Pub (Bar)

Novel approach in developing a building assurance expert system and a discussion on future research and applications in the insurance industry. Since the collapse of HIH, Building Warranty in Australia has stagnated and fragmented, with various state schemes that are now mostly underwritten by government either through agency agreements or reinsurance support. In most states, apartment owners in multi-storey buildings are excluded from these primary schemes. Societal changes have seen continual preference for high density land usage in metropolitan areas, along with, sustained housing affordability issues has fuelled the demand for a building industry that has prioritised on quantity rather than quality. This has all come to a head, with recent high-profile failures in Class 2 Residential Buildings such as ‘Grenfell Tower’, ‘Mascot Tower’ and ‘Opal Tower’.

Consequently, the NSW government has embarked on a construction industry transformation agenda, including seed funded development of a building assurance solution. This paper and presentation discusses the development processes, the assurance frameworks and potential use cases for this novel expert system. The system comprises of several innovative features, including unique applications of Blockchain, Bayesian Expert System, Building Assurance Framework and a Graph Database backend. A demonstration of the expert system will be given and use cases for the building industry presented. Further research on calibration of the system, future enhancements and how the insurance industry can use the system in the underwriting of new products will be discussed. Additionally, a call to how insurers and underwriters can contribute to future system development will be highlighted. Actuaries, working alongside engineers and developers, can play a role in restoring trust in buildings. Our “Bridge to Tomorrow” is ensuring high rise apartments can be a secure and safe place called home.

Find the Q&A here: Q&A on 'External Challenges for the General Insurance Industry'