Construction Insurance Market Recap 2020 (Pacific)
In the Pacific region, contract works insurance premiums increased on average by 30%-35% throughout 2020. Construction liability insurance costs also rose, with excess layer pricing increasing at a higher rate (15%-30%) than that of primary layers (15%).
The global construction market’s dynamics have shifted significantly in the last 12-18 months, with an unprecedented number of insurers exiting the market and many insurers placing their construction books into run-off as a result of deteriorating profitability.
Similar to global market trends, a sustained period of falling insurance premiums and broadening coverage is now making way for a shift towards increased pricing, higher excess levels, and more restrictive coverage in the Australian construction market.
Please download our full report Pacific Construction Insurance Market Recap for more details on the local construction insurance market’s capacity, coverage trends, the impact of COVID-19 and 2021 outlook. (For a summary of construction markets in other regions, refer to our Global Construction Market Update.)
Below, Gary Hastings (Construction Practice Leader - NSW) provides an overview of the insurance market conditions being faced by the construction industry in Australia and New Zealand, how he expects them to change and what clients can do to minimise the effect of the changing market.
LCPA No. 21/033
NOTE: This construction report is a part of the 2020 Australian Insurance Market Recap Series – a series of local market insights by insurance class, with a specific focus on the state of market in Australia. Other insurance classes featured in the series include: