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
Adaptive Reuse | Jan 18, 2024
Coca-Cola packaging warehouse transformed into mixed-use complex
The 250,000-sf structure is located along a now defunct railroad line that forms the footprint for the city’s multi-phase Beltline pedestrian/bike path that will eventually loop around the city.
Sponsored | BD+C University Course | Jan 17, 2024
Waterproofing deep foundations for new construction
This continuing education course, by Walter P Moore's Amos Chan, P.E., BECxP, CxA+BE, covers design considerations for below-grade waterproofing for new construction, the types of below-grade systems available, and specific concerns associated with waterproofing deep foundations.
Sponsored | Performing Arts Centers | Jan 17, 2024
Performance-based facilities for performing arts boost the bottom line
A look at design trends for “budget-wise” performing arts facilities reveals ways in which well-planned and well-built facilities help performers and audiences get the most out of the arts. This continuing education course is worth 1.0 AIA learning unit.
Giants 400 | Jan 15, 2024
Top 130 Hospital Facility Architecture Firms for 2023
HKS, HDR, Stantec, CannonDesign, and Page Southerland Page top BD+C's ranking of the nation's largest hospital facility architecture and architecture engineering (AE) firms for 2023, as reported in the 2023 Giants 400 Report.
Airports | Jan 15, 2024
How to keep airports functional during construction
Gensler's aviation experts share new ideas about how to make the airport construction process better moving forward.
Adaptive Reuse | Jan 12, 2024
Office-to-residential conversions put pressure on curbside management and parking
With many office and commercial buildings being converted to residential use, two important issues—curbside management and parking—are sometimes not given their due attention. Cities need to assess how vehicle storage, bike and bus lanes, and drop-off zones in front of buildings may need to change because of office-to-residential conversions.
MFPRO+ News | Jan 12, 2024
As demand rises for EV chargers at multifamily housing properties, options and incentives multiply
As electric vehicle sales continue to increase, more renters are looking for apartments that offer charging options.
Student Housing | Jan 12, 2024
UC Berkeley uses shipping containers to block protestors of student housing project
The University of California at Berkeley took the drastic step of erecting a wall of shipping containers to keep protestors out of a site of a planned student housing complex. The $312 million project would provide badly needed housing at the site of People’s Park.
Giants 400 | Jan 12, 2024
Top 10 Casino Architecture Firms for 2023
JCJ Architecture, HBG Design, Gensler, and WATG top BD+C's ranking of the nation's largest casino architecture and architecture engineering (AE) firms for 2023, as reported in the 2023 Giants 400 Report.
Senior Living Design | Jan 11, 2024
Designing for personal technology is crucial for senior living facilities
Today’s seniors are increasingly tech savvy. It isn’t enough to give senior living residents a pre-determined bundle of technology and assume that they’ll be satisfied.