SINGAPORE, April 1, 2025 – The global construction industry is experiencing a remarkable uptick in data centre projects, propelled by the swift pace of technological advancement and the future demands of artificial intelligence (AI). However, this boom is set against the sobering reality of labour scarcities and escalating material expenses, which present formidable obstacles for both the construction and insurance domains, according to the latest Willis Global Construction Rate Trend Report for Q1, launched by Willis, a WTW company (NASDAQ: WTW).
“In Asia, the construction industry is set to experience continued growth this year as a result of both government stimulus and private investments. This drives positive changes in the insurance markets. From large-scale infrastructure projects to the development of smart cities, the region continues its path of delivering complex and sustainable construction. The increased momentum towards sustainability is also a powerful force propelling construction activity in Asia,” said Nicki Tilney, Head of Construction and Natural Resources, Asia at Willis.
Despite robust growth forecasts and the drive for sustainability in the region, several critical issues are emerging in Asia, one of which is the shortage of skilled labour. These shortages can lead to poor quality construction and reduced adherence to safety protocols, prompting insurance markets to closely scrutinise project schedules and costs.
Supply chain management is another ongoing challenge. The availability and timely delivery of materials is critical to the success of any construction project. Disruptions in supply chain can potentially cause significant delays, cost overruns and impact the financial stability of contractors and the projects.
Natural Catastrophes (NatCat) exposures also continue to be a key risk concern across the region, prompting insurers to remain focused on managing and adequately pricing a project’s exposure to NatCat risk. “We recognise the significance and susceptibility of Asia to NatCat events, most recently witnessed by the devastating earthquake affecting Myanmar and Thailand. Events such as this are disastrous and underscore the importance of understanding and addressing the heightened vulnerability of Asian projects to NatCat risk, so that these exposures can be mitigated through robust project design and safety management,” added Nicki.
As the construction industry in Asia continues to evolve, the use of AI in the sector also brings a new set of challenges and complexities for the insurance industry to navigate. “As AI’s role extends from project management to design and even construction, the potential for more novel risks, such as cyber threats, data security and system failures, expands. This shift and exposure to new vulnerabilities will need us to adopt a more comprehensive approach to managing these emerging risks,” said Nicki.
“Nonetheless, we are witnessing a robust response from the insurance market, with a continued emphasis on meticulous underwriting to address the evolving technological landscape. With our unique specialist industry knowledge and expertise, we continue to help developers and construction companies navigate through this difficult business environment.”
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
