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2023 Marsh Global Contractors' Handbook

Confident bearded head Civil Engineer-Architect in sunglasses is Sstanding outside with his back to camera in a construction site on a bright day. Man is wearing a hard hat, shirt and a safety vest.

Understanding risk in a changing construction industry

Throughout 2023, macroeconomic factors have continued to test the construction industry, with inflation and tightening interest rate policies affecting labour availability and material costs.

Cost uncertainties present difficulties for all industries, particularly the construction sector, where the viability of projects is sensitive to cost fluctuations. Other factors shaping the landscape include post-pandemic societal changes, increasing digital connectivity, ongoing strides towards achieving net-zero ambitions, and a pivot away from fossil fuel reliance. Yet while these factors can pose challenges for the construction industry, there are many opportunities, increasingly as a result of digitalisation and decarbonisation. This is especially true for contractors, as demand for new capital investment often reflects global trends.

At the same time, the construction industry is adapting and responding to change. Technology advancements, from artificial intelligence to robotics and innovative materials, are giving rise to increased investments and enhanced efficiency. Yet to harness this demand, the industry may need to rethink how to manage, mitigate, and transfer risks. Cyber, logistical, and production risks will increasingly inform risk strategies and may also necessitate a thorough review of risk allocation.

In the 2023 Global Contractors’ Handbook, we explore some of the challenges taking place in the construction sector and how these impact contractors across the world. As the needs of the construction industry change, and with it the nature and profile of risks, the insurance industry also needs to consider how best to align with the industry, with whom it has been a traditional partner. Management of risk is more important than ever and comes into focus as innovation continues to drive change and introduce new and emerging sources of risk.

Our people

Please contact any of the specialists featured herein if you have any questions.

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Maarten van Haaps

Head of Construction, Marsh Specialty

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Donald Gardner

Head of Construction, Marsh Specialty, New Zealand

Ever changing industry

The construction industry is evolving at a record pace, driven primarily by a complex combination of macroeconomic pressures. But where there are challenges, there are opportunities, which are increasingly being grasped by global contractors. Here we explore the future risks and potential solutions.

Understanding and mitigating risk

With profit margins squeezed in recent times, the need to understand and mitigate project risk has never been more important. Here, we explore the latest contractor-related risks and offer insight into how best to manage them.

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. LCPA 23/486