Aon Risk Solutions released its 2011 Construction Industry Report, which reflects the input of 60 global construction industry respondents to Aon’s 2011 Global Risk Management Survey. While survey respondents cited senior management’s intuition and experience as the primary method to identify major risks, the report underlines the importance for organizations to embrace an enterprise-wide risk management approach that is optimized on a global basis.
The industry’s top risks as identified by survey respondents are included in the report, with the economic slowdown leading the list. Rounding out the top four risks are increasing competition, damage to reputation/brand and failure to attract or retain top talent. Regulatory/legislative changes and third-party liability tied for the fifth spot.
“In today’s business environment of high supply and limited demand, it has become especially vital for organizations in the construction sector to effectively manage risk,” said Henry Lombardi, executive vice president of Aon Construction Services Group. “Relying exclusively on gut instinct could result in a significant loss as leaders may miss an emerging risk.”
Mary Ann Krautheim, client strategy officer of Aon Construction Services Group, added, “The construction industry is expected to grow by 67 percent by 2020. Business leaders who use an enterprise-wide approach to identifying and assessing risks today will emerge from the economic storm in a stronger position with a larger market share.”
Additional findings of the 2011 Construction Industry Report include:
- Construction companies have invested and committed significant resources to risk control/safety practices to help lower the frequency and severity of loss, and according to the survey, they would like to see recognition of this investment by carriers in the form of lower premiums
- Capacity has been steady over the past three to four years with continued low rates. General liability/third-party liability continues to be a key issue for construction companies, most likely caused by concerns over construction defect claims and court interpretations of insurance coverage available to pay these claims
- Heavy industrial, engineering, procurement and construction contractors continue to enjoy strong backlogs, but are experiencing increased global competition
- While ranked number 11 on the list of top risks, political risk/uncertainties is expected to grow as the construction sector expands into developing countries
- Contractors’ abilities to compete with new project delivery methods, such as public-private partnerships, prove to be a challenge and an opportunity. Many non-U.S. contractors understand the value of bringing equity to the deal. This is a trend expected to continue as public bodies lack resources to invest large sums into infrastructure. BD+C
Related Stories
University Buildings | Feb 17, 2022
A vacated school in St. Louis is turned into a center where suppliers exchange ideas
In 1871, The Carondelet School, designed by Frederick William Raeder, opened to educate more than 400 children of laborers and manufacturers in St. Louis. The building is getting a second lease on life, as it has undergone a $2 million renovation by goBRANDgo!, a marketing firm for the manufacturing and industrial sectors.
Data Centers | Feb 15, 2022
Data center boom: How two AEC firms plan to meet unprecedented demand for data center facilities
Ramboll's Jim Fox and EYP Mission Critical Facilities' Rick Einhorn discuss the recent joining of their companies at a time of unprecedented data center demand. BD+C's John Caulfield leads the discussion with Fox, Ramboll's Managing Director for the Americas, and Einhorn, EYP Mission Critical Facilities' Managing Director.
Architects | Feb 15, 2022
Binkley Garcia Architecture and Goodwyn Mills Cawood join forces in Nashville
Goodwyn Mills Cawood (GMC) is pleased to announce the acquisition of architecture and interior design firm Binkley Garcia Architecture in Nashville.
Resiliency | Feb 15, 2022
Design strategies for resilient buildings
LEO A DALY's National Director of Engineering Kim Cowman takes a building-level look at resilient design.
Products and Materials | Feb 14, 2022
How building owners and developers can get ahead of the next supply chain disaster
Global supply chain interruptions that started at the very beginning of the pandemic are still with us and compounding every step of the way. Below are a few proven tips on how to avert some of the costly fallout should we be faced with similar commercial disasters at any time in the future.
Urban Planning | Feb 14, 2022
5 steps to remake suburbs into green communities where people want to live, work, and play
Stantec's John Bachmann offers proven tactic for retrofitting communities for success in the post-COVID era.
Urban Planning | Feb 11, 2022
6 ways to breathe life into mixed-use spaces
To activate mixed-use spaces and realize their fullest potential, project teams should aim to create a sense of community and pay homage to the local history.
Senior Living Design | Feb 11, 2022
Design for senior living: A chat with Rocky Berg, AIA
Rob Cassidy, Editor of MULTIFAMILY Design + Construction, chats with Rocky Berg, AIA, Principal with Dallas architecture firm three, about how to design senior living communities to meet the needs of the owner, seniors, their families, and staff.
Architects | Feb 11, 2022
How computer simulations of vision loss create more empathetic buildings for the visually impaired
Here is a look at four challenges identified from our research and how the design responds accordingly.
Healthcare Facilities | Feb 10, 2022
Respite for the weary healthcare worker
The pandemic has shined a light on the severe occupational stress facing healthcare workers. Creating restorative hospital environments can ease their feelings of anxiety and burnout while improving their ability to care for patients.
