Insurance Market Conditions for the Construction Industry
Obtaining insurance for construction industry risks is going to be more difficult over the next year. That's the consensus of a panel of insurance industry executives that was featured at the recent Construction Risk Management Conference held in Seattle, Washington on November 10-13. This conference is produced annually by the International Risk Management Institute. Appearing on the panel were: Brian Cooper, senior managing director for construction at Arthur J. Gallagher & Co.; Gary Kaplan, president, North America Construction AXA XL, and; Jeff Lamb, chief operating officer at Markel Assurance.
There was general agreement from all panel members that the insurance market for construction risks has been changing since the first of July 2019. These insurance executives see that the market is becoming less and less friendly to clients. They noted that soft markets, one that we are exiting, last longer than hard, or adverse, market conditions do. The construction industry has been in a soft, favorable insurance market since 2003. Rates over the past 5 years have been reduced by 2.5 percent on the average, but in the last year have increased by an average of 4 percent for all clients and 5.5 percent on the average for those in the construction industry. They advised that on renewal of insurance coverage, customers may see big increases in their insurance premiums, which reflect the changing insurance market. They encouraged contractors in the audience (and outside of it, too) to start pricing the anticipated increases into their estimates for future work.