The global construction sector looks set for growth as governments focus on major infrastructure projects to boost economic activity.
“The switch to sustainable energy and the adoption of modern building methods will transform the risk landscape, with radical changes in design, materials and construction processes” according to a report by Alliance.
In fact, Oxford Economics estimates the sector will grown by 42 per cent during the coming decade. Globally, the sector could be worth $15 trillion by 2030 – up from just under $11 trillion today. In particular, Asia-Pacific region will account for $2.5 trillion worth of growth – over 50 per cent higher than today.
Buildings and construction projects produce significant greenhouse gas emissions. The UN estimates that the global construction sector creates 38 per cent of all energy-related CO2.
But this represents an opportunity for growth in the sector. For example, refurbishing existing buildings and recycling and reusing building materials could create a whole new industry.
On the other hand, the size of renewables projects create fresh challenges. For instance, as offshore projects become larger, and turbines more powerful, risks during construction can increase.
“The size of investment offshore is huge and can easily run into the billions for a single project,” says David Wilson, Global Head of Energy Claims at AGCS.
Such massive, complex projects require more capital and entail greater risk. “Compared with other forms of renewables, offshore wind construction projects have more potential for delay in start-up (DSU) limit losses when the size of the turbines necessitates unique installation vessels,” Wilson said.
In addition, risk is likely to move from the construction site and into factories, the report said. That is because construction companies increasingly manufacture components offsite. Innovation could mean that buildings in future are prefabricated using robotics and 3D printing technologies.
“It is the future, and this will have consequences for claims, underwriting and manufacturing,” Martin Eckel, Senior General Adjuster, Global Claims Key Case Management at AGCS, said. “For example, risk assessments will increasingly need to include offsite manufacturing facilities.”