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Research & Briefings

Construction Insurance Market Recap 2020 (Pacific)

 


In the Pacific region, contract works insurance premiums increased on average by 30%-35% throughout 2020. Construction liability insurance costs also rose, with excess layer pricing increasing at a higher rate (15%-30%) than that of primary layers (15%).

The global construction market’s dynamics have shifted significantly in the last 12-18 months, with an unprecedented number of insurers exiting the market and many insurers placing their construction books into run-off as a result of deteriorating profitability.

Similar to global market trends, a sustained period of falling insurance premiums and broadening coverage is now making way for a shift towards increased pricing, higher excess levels, and more restrictive coverage in the Australian construction market.

Please download our full report Pacific Construction Insurance Market Recap for more details on the local construction insurance market’s capacity, coverage trends, the impact of COVID-19 and 2021 outlook. (For a summary of construction markets in other regions, refer to our Global Construction Market Update.)

Below, Gary Hastings (Construction Practice Leader - NSW) provides an overview of the insurance market conditions being faced by the construction industry in Australia and New Zealand, how he expects them to change and what clients can do to minimise the effect of the changing market.

LCPA No. 21/033

 

NOTE: This construction report is a part of the 2020 Australian Insurance Market Recap Series – a series of local market insights by insurance class, with a specific focus on the state of market in Australia. Other insurance classes featured in the series include: 

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.

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