White Paper

Rapid Growth in Construction Means Greater Risk — and Demand for Smarter Underwriting

A convergence of new trends and old challenges makes construction riskier than ever. Managing those risks requires an insurer who can adapt to unique needs.

White Paper Summary

Construction is inherently risky. Large projects, lots of stakeholders, expensive heavy equipment, and dangerous work characterize the industry. More recent trends — like the ongoing labor shortage and the introduction of new technologies amid increased demand in a booming economy — means managing a project’s risks is more complicated than ever.

Total spending in engineering and construction in the U.S. will be up 6 percent by the end of 2018 over 2017, according to construction management consulting firm FMI. The industry as a whole hit 5 percent growth this year. At the same time, though, rising costs of materials drive up the value of property claims, and relentlessly increasing healthcare costs make workers’ compensation coverage more expensive. Managing increased demand amid tightening cost constraints creates opportunities for error.

Several carriers over the past few months have exited construction rather than deal with the complexities. AIG has exited the NY construction market as have a few other domestic carriers. Many are now evaluating their commitment to the construction market.

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To learn more about Starr Companies, please visit their website.

Starr Insurance Companies is a global commercial insurance and financial services organization that provides innovative risk management solutions.

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The R&I Editorial Team can be reached at [email protected]