FIRE ON THE RAMPAGE

 

During the first Quarter of the year 2009, fire events have occurred in quick succession causing a lot of material damage and human suffering including loss of human life. Eventually, the losses will cause a lot of strain to the resources of the Insurers and the Reinsurers in the region and even internationally.

 

Some of the headlines that have hit the local Newspapers concerning these fire events have read variously as follows:-

 

Fire Tragedy hits City’s Supermarket

 

A thunderous explosion, a stinging blanket of smoke over Nairobi and wailing sirens completed a gloomy picture that enveloped the city. From a far it looked like a complete meltdown of Nairobi’s central business district after one of its major 24 hour supermarket chain was engulfed in a vicious inferno. Within minutes, the Supermarket was up in flames.

 

“As you can see, we are just watching for now. There is nothing we can do. We are just on standby………………….” A fire fighter was heard to say as he looked helplessly at the inferno.

 

Market Fire raises burning Questions

 

The Fire that gutted the market exposed lack of readiness of the Police Fire Brigade. The Fire brigade is reported to have arrived one hour after the fire broke out, even though its headquarters are right behind the market.

 

The makeshift market had 3,000 stalls with 25,000 thousand traders. All the stalls were razed to the ground and the traders rendered destitute.

 

The police chief attributed the delay to poor planning, which has led to unnecessary congestion………………

 

Tourist resorts razed to the ground

 

Two popular beach resorts in Bagamoyo, coast region were to day reduced to ashes in less than fifteen minutes due to a fire that begun in the kitchen of one of the Hotels.. The mid-morning inferno is likely to render about 380 workers of the two hotels jobless.

 

The Fire which is believed to have been ignited by a gas cooker, spread fast to other parts of the hotel due to thatched roofs and the strong winds…………

 

From the above cited incidents, what comes out prominently is that fire occurrence leads to serious losses in property and life. Consequently, there is the resultant unemployment, lost business incomes and opportunities, reduction in property values, and additional expenses towards restoring the property affected or destroyed.

 

Plant, Animal, vegetation, and woodlands are destroyed and, medical expenses for treatment of injuries, burns, are incurred .There is further loss of income for injured parties.

 

The national economies are generally affected as jobs are lost, and Industries and commercial operations are closed.

 

Fire has been with mankind from the Stone age, through the Bronze age, followed by the Iron age up to Industrial age, and has been the driving force of technology, and will continue to be so in the future. Thus fire if wisely used, is our biggest friend, but we have to implement measures to control it, because uncontrolled it becomes the worst enemy.

 

Fire can be defined as a gas phase of a chemical reaction involving three essential elements of oxygen, fuel and heat. These elements form what is called the Fire Triangle.

 

Fire as used in Insurance means actual ignition of something which ought not to be on fire, and it must be accidental or fortuitous so far as the insured is concerned.

 

Once a fire starts, the chain reaction in place will continue if not be interrupted. As more fuel burns, the amount of heat present will increase and the fire will grow stronger. Strong fires usually create their own drafts, thus bringing in more oxygen to the fuel. Consequently the fire will grow, engulfing more and more fuel, as the burning process literally feeds itself.

 

Fires are caused variously and among the common causes are open fire or flame, electrical faults, malicious or intentional (arson), smoking, hot works, and friction or overheating of parts of equipments due to lack of maintenance etc. There are also natural causes of fire such as earthquakes, lightning, etc.

 

The table below shows the frequency of fires as per causes above.

 

Cause of Fire	% age
Open flames	37.00%
Electrical	35.00%
Arson	8.00%
Undertemined/Suspicios	7.00%
Smoking	5.00%
Others	7.00%

 

 

Due to the damage fires cause, they cannot be ignored and must be controlled, if cannot be stopped altogether. The best possible situation is to have no fire, since no fires means no losses/claims.

 

The occurrence of this perfect situation requires that more emphasis be put in preventing the fire from occurring. However on the contrary, there has been drastic escalation in terms of number of fires occurring, steady increases in monetary losses suffered by individuals, industry and most importantly by insurers.

The Insurance Industry which feels the financial impact of the fire incidents needs to play a leading role in controlling the fires. This they can do by insisting that their clients implement the fire loss prevention measures; which are simply the measures and procedures aimed at reducing or minimizing chances of occurrence of a fire loss. They also include measures taken to ensure adequate protection of facilities, equipments, and personnel from the perils of fire.

 

The fire loss prevention involves the risk management philosophy, which consist of fire prevention and fire protection.

 

A fire prevention programme  consist of  prevention procedures which include matters such as  response to alarms, understanding operation of the   fire systems , conducting of periodic drills, critiques and exercises, interfacing the prevention measures  with other company functions and offsite organizations or personnel, good housekeeping, adequate warning notices and signs, appropriate handling and control of flammable and combustible substances, bulk flammable gases and liquids, appropriate handling and control of compressed gas cylinders, control of cuttings, welding and or grinding activities, fire safety information display for all the employees and contractors, lockout systems etc.

 

The Fire loss prevention measures require constant monitoring because fire is widely used and any slip can cause damages of huge magnitudes.

 

A fire insurance underwriter’s principal job is to screen incoming new business and renewals; admitting good risks, and denying or placing conditions on poor risks. Given this, there are several major factors that insurance underwriters need to understand about fire:-

 

1. Fire –caused property losses are more costly than those caused by all classes of crime or natural disasters.
2. Arson/Intentional damage is a large contributor to fire losses experienced in non-residential commercial buildings.
3. One in every four fires is intentional.
4. Approximately 85% of Arson cases go unresolved and only 2% of arson cases results in the offenders conviction of crime of arson.

 

A combination of the “arson problem” with the large losses suffered from fire incidents requires that fire loss prevention measures be given more prominence in protecting the Insurance Industry from this peril.

 

For Insurers, fire prevention has its foundation in quality screening of risks through risk surveying.

 

When conducting a survey, the first task of the surveyor is to gather the critical material facts that relate to the risk. It is important that the surveyor obtain the correct information as he is bound to give advice about the risk concerned.

 

For purposes of loss prevention, the surveyor having identified the risky features must decide and give advice on how they should be handled. Using his expertise and depth of knowledge, he will make recommendations required for risk improvement e.g. installation of suitable fire alarms, installation of appropriate fire fighting appliances,  and/or fire suppression systems, fire doors or construction of fire proof compartments for segregation of hazardous processes or materials as may be required.

 

Fire risk survey exposes potentially bad risks thereby allowing for the risks to be adequately improved physically or for underwriting purposes, recommendation of warranties and or conditions to be imposed or preventing the risk from being underwritten if found to be potentially bad.

 

In addition to the physical inspection of the risk, the surveyor will also screen the existing fire loss prevention programmes with the aim of uncovering weaknesses, making recommendations to improve the program, and identifying and informing the underwriters of cases where potential gains can be achieved by arson. This is aimed at eliminating the risk of moral hazards where the premises owner sets his own premises on fire in order to gain from insurance.

 

For a successful fire survey and underwriting the practice should be to survey as many risks as possible in the portfolio, and the underwriters should not participate in bad risks until the surveyor’s recommendations are fully implemented.

 

Studies have established that human errors are the leading cause of fires and explosions in industry. Actually 70-80% of the fires are caused through human errors, (Management programme deficiencies, human error operators), followed by equipment failures which causes 10-20% (design, maintenance deficiencies and lastly external factors (earthquake, lightning etc.  ) which are responsible for 10-20% of the Fires.

 

In order to alleviate or reduce error leading to fire incidents, the surveyor must clearly spell out how to deal with different human circumstances including training.

 

Fire prevention has its challenges and these include  limited budgets, low staffing levels, poor equipments, difficulty in access to the fire sites due to traffic congestions, poor planning, poor building  designs, and complacent mindsets - It will not happen to us.

 

In conclusion fire prevention should be the prized objective in any fire risk management process, in that a plan is implemented that does not allow fires to begin in the first place.

 

If fire prevention fails, subsequently the fire protection measures should be adequate to deal with the ensuing fire incident.