Project management is risk management

Managing such gigantic projects is an enormous challenge. Immense values are concentrated in an extremely small space, often involving the use of novel technologies. Munich Re is a much-sought-after partner especially in such cases, offering not only its financial strength but much more besides: its engineers’ know-how and practical experience, structured risk analyses, and customised coverage concepts.

The desert is alive!

Particularly in the United Arab Emirates, structures are being constructed that could have come from a science fiction film. At the end of 2008, the island of Palm Jumeirah was opened in Dubai, which is also where Burj Dubai with its incredible height of 820 metres will be finished in the autumn of 2009. In the neighbouring emirate of Abu Dhabi, the foundation stone was laid at the end of 2007 for Yas Island, a 25-km² complex around the new Formula One track with theme parks, hotel complexes, shopping centres, apartments, and yacht harbours. Munich Re is the leading reinsurer for these gigantic projects and is also responsible for risk management on the insurance side. How did this come about?

Munich, November 2007:

The phone rings in a Leopoldstrasse office. A primary insurer from the Arab region is seeking reinsurance backing for Yas Island, currently the world’s largest single construction project. The insurer proposes a meeting in Abu Dhabi to discuss the details. Christian Bendel, a civil engineer at Munich Re with responsibility for projects in the Middle East, shakes his head when he hears that the industrious executive from the local project developer thinks it will take only a 15-minute presentation plus question time to clear up all the technical points that need to be discussed before we can make an offer. Just over an hour for a 34-billion-dollar project involving about a hundred separate construction sites all being handled by different firms? Is that really possible?