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What is mass timber, and why should insurers care?

By Doug Kahn  |  April 24, 2018

Verisk mass timber researchMajor changes in construction materials are rare and often transformative. That’s true with the latest development: a return to wood, specifically “mass timber.”

Larger, stronger

Mass timber is made by affixing several pieces of dimension lumber (lumber cut to standard or specified sizes, such as a two-by-four) or wood veneers to form larger, stronger pieces, such as panels and beams. If the pieces form the primary load-bearing structure of a building, the building is “mass timber construction,” a style very new to the United States.

Mass timber’s use in tall wood buildings is increasing, creating new exposures for insurers—and new opportunities.

Mass timber doesn’t fit easily into long-established construction classes, and it challenges the assumption that combustible materials aren’t suitable for constructing tall buildings. Because it’s new to today’s marketplace and little statistical data exists, insurers must take care to develop underwriting guidelines and appropriate rates. With fire a major property peril, mass timber’s combustibility is a significant risk factor.

What’s old is new again

For centuries, wood, stone, iron, and masonry were the basic building blocks for many structures, but inexpensive mass-produced steel and concrete replaced those materials in the latter half of the 19th century. That revolutionized building design, giving rise to taller buildings and the modern city skyline. Wood was relegated to homes and small commercial buildings.

Mass timber, which is much stronger than traditional wood, is helping wood make a comeback – for several reasons.

First, costs may be lower with mass timber than with traditional concrete and steel materials and methods. Initial research indicates that mass timber projects can be completed approximately 25 percent faster than a similar concrete project. In urban infill sites, some construction industry professionals estimate that mass timber will create 90 percent less construction traffic and require 75 percent fewer workers. That leads to significant savings.

Second, mass timber is more environmentally friendly and more compatible with Leadership in Energy and Environmental Design (LEED) certified construction. Wood is a renewable resource (unlike concrete or steel), has a smaller carbon footprint, and takes much less of an environmental toll at point of extraction.

Third, mass timber offers huge economic potential for the lumber industry and manufacturing jobs, especially in forested areas, such as the Pacific Northwest in the United States and Canada.

Underwriting implications

There are many risk factors to consider when underwriting mass timber construction at the present. Some of these factors are similar to other types of construction risk, while others stem from the newness of mass timber as a building material. Insurers may want to know about the building’s construction plan, exposures to catastrophes and other events, and details of exterior and interior design.

Factors for underwriters to consider include:

  • source of material
  • moisture content of wood and construction sequencing
  • combustibility and fire resistance
  • presence and effectiveness of automatic sprinkler systems
  • performance under wind and earthquake stress
  • ability to hold up to water damage
  • mold and fungus exposures
  • insect and pest exposures
  • types of wood adhesives used
  • replacement costs
  • long-term performance
  • potential casualty exposures

Verisk’s The Mass Timber Revolution explores this new topic in depth, discussing more about mass timber, its history, current uses, and risks to insurers.


Doug Kahn is director of commercial property product development at Verisk. You can contact him at Douglas.Kahn@verisk.com.