Corporate Insurance Partner - iTWO Project Cost Insurance

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iTWO Project Cost Insurance

With iTWO Project Cost Insurance, your construction project will remain within budget. The IT-based concept provides cover for additional costs.

Owners, developers and investors around the world are undertaking ever larger and more complex construction projects, where closely calculated margins, high risks and a large number of parties all come together. An overwhelming mass of information is exchanged at different times, in different places, between the different project members. The biggest challenges in this context are maintaining an overview and keeping the complex structure within budget. Experience with extreme cost overruns for construction projects in the past illustrates that this is not always possible.

The iTWO 5D technology ensures the project can progress as smoothly as possible
In the past insurance for unplanned cost increases in the construction phase of a project was not considered viable. But now, Munich Re, in collaboration with RIB Software, one of the leading technology providers of BIM (building information modelling) 5D and ERP solutions, has developed the world’s first IT-based insurance product for construction projects: iTWO Project Cost Insurance (PCI).

The solution is grounded in the iTWO 5D technology developed by RIB, which offers model-based planning and building, along with integrated cost and time controls. Among other things, the technology facilitates the virtual planning, simulation and monitoring of a construction project and, for the first time ever, makes it possible to provide insurance cover.

Insurance cover based on iTWO 5D technology

iTWO 5D technology significantly reduces risk and provides a high level of project transparency. Munich Re is therefore willing and able to offer insurance coverage for additional costs of construction projects.

The coverage extends to the cost difference between the virtual simulation and the cost actually incurred by the owner after physical realisation of the construction project as planned in the iTWO 5D.

A basic prerequisite for the insurance cover offered by Munich Re is that the project must be jointly planned by the parties involved in the required level of detail, and that the iTWO 5D technology is used for planning purposes. The insurance cover will be approved provided the construction project simulation runs smoothly at the end of the planning phase.

This ensures that construction costs remain within budget
The construction costs can be reduced through alternative proposals, meticulous work preparation and by avoiding time-consuming and costly solutions on the construction site. Experience has shown that the expected construction costs, including the deductible and the cost for iTWO PCI, are generally lower than the starting budgets. The residual risk of cost overruns is covered by the iTWO PCI up to a pre-established policy limit.

Your advantages at a glance:

  • Increased transparency: With the help of the iTWO technology, all the parties involved in a project work together on one database. Matters are mutually coordinated on the spot, thereby eliminating interface problems.
  • Greater degree of planning certainty: Simulating a construction project allows shortcomings to be identified and remedied before the actual construction is carried out, bringing savings in terms of both time and expense.
  • Cost reduction: The iTWO technology transfers the bulk of construction obstacles to the planning phase. Experts estimate that savings of up to 30% can be achieved by reducing the number of faults during the construction phase.
  • Scheduling security: Investing more time in the planning phase is offset by time savings during the physical construction itself, and also increases the chances of the structure being completed and commissioned on schedule.
  • Greater investment security: The iTWO technology substantially reduces the risk of unforeseen additional cost and the residual risk is adequately covered by the insurance policy.

Please contact us to discuss your specific situation. We look forward to speaking with you about a solution that is tailored to you.

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Roman Boos
Senior Underwriter

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This publication is available exclusively to Munich Re clients. Please contact your Client Manager.