There's a palpable sense of optimism among practitioners in the Construction insurance space who see this current bull market continuing and even growing. The private construction industry, in particular, has been in an upward trajectory over the past five years — providing a great deal of opportunity to insurers.
“The construction market is booming, with total project values approaching the high-water mark set in 2007 shortly before the financial crisis,” says Rob Brewer, vice president of industry solutions at The Hanover Insurance Group. From an insurance perspective, he adds, “there is ample capacity to take on well-managed risk.”
Brewer adds a cautionary note, however. A shortage of skilled labor and experienced management, combined with the stresses of working to meet the shifting needs of the construction economy, will continue to have an impact on losses. Whether it's residential buildings, commercial and institutional structures, or improving infrastructure, “underwriters need to be aware of the past, watching for signs that their customers may be taking on more work than they can effectively manage,” he notes.
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