【WTW】2024年第三季度全球建筑率趋势报告-2024_32页_5mb

Global Construction Rate Trend Report Summary (Q3 2024)

Core Content

This report provides an overview of the current trends and outlook in the global construction insurance market, focusing on rate movements, market capacity, and key sector dynamics. It highlights the balance between market stability and challenges such as natural catastrophes, economic pressures, and evolving risk profiles.

Main Points

• Market Stability: The construction insurance market is showing signs of stability, with capacity levels comparable to those seen in early 2019. This stability is expected to continue through 2024 and into 2025.

• Rate Trends:

  • General liability (GL) rates are increasing by 5% to 15%.
  • Auto liability and physical damage rates are up by 10% to 15%.
  • Workers' compensation rates are flat to +5%.
  • Umbrella (lead) rates are increasing by 5% to 15%.
  • Excess rates are rising by 10% to 15%.
  • Non-High I Nat Cat Projectic Builders Risk is up by 10%.
  • Nat Cat Project Specific Builders Risk is up by 10% to 20%.
  • Master Builders Risk/Contractors Block is up by 5% to 10%.
  • Professional liability (PL) is flat to +5%.
  • Project specific/controlled insurance programs for excess are flat to +10% and +5% to +30%.
  • Subcontractor Default Insurance (SDI) is flat to +5%.

• Key Sectors:

  • Infrastructure & Energy: Expected to grow significantly in 2024, with infrastructure up by 5.1% and energy and utilities by 7.8%. These sectors are driving construction growth globally.
  • Renewables: Continued focus on renewable energy projects, such as solar and wind, is a key growth driver.
  • Manufacturing: High investment in technology manufacturing, including semiconductor facilities, EV battery plants, and data centers.
  • Healthcare: Hospitals and healthcare facilities are also seeing increased construction activity.

• Challenges:

  • Natural Catastrophes: Regions like the Caribbean, Gulf of Mexico, U.S. East Coast, and parts of Australia, Asia, and Latam remain highly exposed to natural disasters, leading to cautious underwriting and higher rates.
  • Economic and Political Factors: Global elections may delay or cancel projects, affecting construction activity in key regions like India, France, the UK, Mexico, and the U.S.
  • Labor and Material Shortages: These continue to impact project timelines and costs, influencing insurance pricing and risk management strategies.

• Technological Adoption: The industry is increasingly adopting AI, drones, wearables, and robotics to address labor shortages and improve operational efficiency. This is expected to enhance risk profiles and reduce losses.

• Market Dynamics:

  • Competition: New entrants and international insurers are increasing market competition, particularly in low-to-moderate risk segments.
  • Brokers: Play a crucial role in facilitating risk transfer and ensuring optimal insurance terms through detailed risk analysis and communication.
  • Risk Mitigation: There is a greater emphasis on risk profiling, mitigation strategies, and detailed project information.

• Capacity and Coverage:

  • Umbrella/Excess: Stabilizing, with more favorable rates for low-to-moderate risk profiles and positive loss histories.
  • Project-Specific Programs: More available and favorable, though limited for high-risk or complex projects.
  • SDI Market: Expanding with higher limits and more flexible terms, but also increasing in complexity and claims.

Regional Insights

• North America:

  • Auto liability and lead umbrella lines remain problematic, with limited capacity and higher rates.
  • New York CIPs are viable for large or ongoing projects.
  • SDI is expanding, with six active carriers offering up to $50 million coverage.
  • Environmental risks, such as siltation and pollution, are becoming more prevalent and are managed through integrated policy forms.

• Global Trends:

  • Capacity: Increased due to new entrants and international insurers.
  • Reinsurance: CAT bonds are in high demand, with returns close to 20%, indicating a more lucrative reinsurance climate.
  • Political Impact: Elections may delay or cancel projects, affecting construction growth and insurance demand.

Market Outlook

• Rate Stability: Most regions and product lines are expected to maintain stable pricing in 2024.
• Future Adjustments: More noticeable rate changes are anticipated in 2025 and beyond.
• Interest Rates: Affect insurance profitability and investment strategies, with higher rates leading to lower reserve requirements and potentially higher profits.

Conclusion

The construction insurance market is currently in a stable and competitive phase, driven by increased capacity and cautious underwriting. While challenges such as natural catastrophes, labor shortages, and economic uncertainties persist, the industry is adapting through technological innovation and strategic risk management. Brokers and insurers are playing a vital role in navigating these dynamics to secure favorable terms and conditions for clients.