With insured losses from the flooding events across Australia’s east coast estimated at around A$6.8billion, the positive outlook for the construction insurance market has proved to be short lived.
Unprecedented weather events created the costliest natural catastrophe event in Australia’s history and was the largest single nat cat loss globally outside of the USA for 2022.
While Australia began last year with signs that the hardening insurance market was slowing for the construction sector, these events have exacerbated the strains on supply chains, including materials and labour. There are particular issues in northern NSW and Queensland, but the construction industry as a whole is seeing a knock-on effect, with some significant contractors going into liquidation.
In our latest Construction Market Update, Mark Thompson says the pressures are unlikely to subside in the short term and it has never been more vital for organisations to demonstrate that they have positive risk management and mitigation processes in place.
The update, which can be downloaded below looks at all the major insurance classes for construction including:
Insurers will continue to focus on quality underwriting information, particularly around contractor management and quality management, the previous loss history and any lessons learned and/or changes in their processes to mitigate future losses.