The construction insurance market is in a state of transition from a market that has seen generally stable or declining pricing for over a decade to one in which prices are generally rising. This is being driven by:
- Changing underwriter appetites.
- A reduction in available capacity from specialist construction insurers.
- A series of losses.
- Insurance market conditions more generally.
- Insurance pricing for the construction industry in the region started increasing towards the end of 2018, with changes in terms and conditions following suit a few months later after a prolonged soft insurance market cycle.
- Many did not expect the changes to occur as quickly as they did with some companies committed contractually to terms and pricing that were much more difficult to secure, if achievable.
- The tighter underwriting controls mean that underwriters are generally considering the experience and reputation of each contractor as part of their process.
- While this is the general overview of the Asian market, the circumstances may differ if there are Chinese, Korean, or Japanese interests involved in a project.
- Smaller and less complex insurance programs, typically attract more competitive terms if there is adequate capacity from local carriers.
Below YC Wong (Regional Director, Construction Placement) and Alistair Urquhart (Global Head of Construction Placement) provide an overview of the insurance market conditions which are being faced by the construction industry, within the region and globally, how they expect them to change and what clients can do to minimize the effect of the changing market.
Please download the documents to access more in depth analysis of the insurance market conditions for the construction industry.