Allianz Global Risks UK says the introduction of a global standard within a large multinational is fundamental for confidence and stability in its loss control management.

The Regulatory Reform Fire Safety Order came into force on 1 April in the UK, with improvements and simplification to fire legislation. The long-awaited reform of the building regulations (Approved Document B) is due in 2007, and will directly affect how fire safety is designed.

The implications of this double-barrelled approach to modernising the existing system are wide-ranging and of significant consequence to the future role of both insurer and insured, says Allianz.

According to published estimates, Buncefield fuel depot owners Chevron-Texaco and Total Oil face a potential £1bn bill. However, they must also consider further non-insurable costs that can have an impact on market competitiveness. The fire risk posed by large commercial buildings cannot be ignored, but the risk created by the increasing volume of uncompartmentalised, single-storey buildings is more significant.

The insurer believes that attention paid to establishing the idea of a global standard will benefit businesses on an international scale. Increased insurance confidence will be achieved, as will insurance premium consistency, standardised loss control programmes, confidence in operational continuity and the early recognition of essential requirements by plant designers.