Another way the reinsurer shares loss prevention knowledge, best practices, and risk management tools with companies is through its Fire Prevention Forum, organized in conjunction with Underwriters Laboratories (UL). UL is a product safety testing and certification organization.

Held annually in the fall, the two-day forum includes a tour of UL's large-scale fire testing laboratory in Northbrook, Ill. Swiss Re helped UL build and fund the lab about 10 years ago. The Illinois lab is just one of 62 testing and certification facilities operated by UL around the world.

Using state-of-the-art technology, UL's fire testing lab simulates conditions within a client's buildings or warehouses to see whether the company's sprinkler systems and water supplies provide adequate protection.

“The most significant risk management issue companies face from a fire is business interruption,” says Martin Pabich, a staff engineer at UL. “It's not just the fire that causes damage, it's also the water used to put it out and the smoke damage to a company's tape cartridges, data storage units, and other equipment.”

Conducting fire tests, fire modeling, and other natural disaster simulations allows companies to assess problems proactively and develop potential solutions before catastrophe strikes. “Fire testing helps companies figure out their risk in a controlled environment instead of waiting for a multimillion-dollar loss to occur and discovering there's a problem after the fact,” Heinze asserts.

The UL lab's main fire testing cell measures 120 feet by 120 feet, with a 100-foot-by-100-foot movable ceiling. “The ceiling can move from four feet above the floor to 48 feet above the floor,” Pabich indicates. “It's basically the world's largest land-based elevator.”

During an actual fire test, a computer monitor shows engineers the location of every sprinkler and records temperatures in real time. When a sprinkler operates, the temperature drops, causing a change in the monitoring program.

“We use a computerized statistical analysis process that constantly scans the ceiling temperatures and other parameters to help us determine what's going on during the fire test,” Pabich says. “This allows us to see what's happening on the ceiling of a room that's on fire–something you normally couldn't see due to smoke and flames.”

If a company “fails” a fire test, top executives may need to change the facility's fire protection systems or make other adjustments in operations to meet any new hazards identified during the test.

Because fire tests are customized, the cost for conducting a test can vary. But the benefits may be priceless.

“The cost of doing a fire test is a fraction of the cost companies would see if they have a risk in their facility they don't understand or don't know about,” Heinze says. “Those unknown risks could wind up costing companies millions of dollars in business interruption or loss of buildings or product.”