flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

Struggling economy demands construction industry embrace enterprise-wide risk management

Struggling economy demands construction industry embrace enterprise-wide risk management

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.


By By BD+C Staff | November 15, 2011
construction management risk Aon
In todays business environment of high supply and limited demand, it has become especially vital for organizations in the const

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

| Apr 26, 2013

Solving the parking dilemma in U.S. cities

ArchDaily's Rory Stott yesterday posted an interesting exploration of progressive parking strategies being employed by cities and designers. The lack of curbside and lot parking exacerbates traffic congestion, discourages visitors, and leads to increased vehicles emissions.

| Apr 26, 2013

Decaying city: Exhibit demonstrates the fragility of the man-made world

Theater set designer Johanna Mårtensson built a model cityscape out of bread only to watch it decay.

| Apr 25, 2013

SmithGroupJJR hires Lise Newman as Workplace Studio Leader in Detroit

SmithGroupJJR, one of the nation's largest architecture, engineering and planning firms, has hired architect Lise Newman, AIA, as Workplace Studio leader at its Detroit, Mich. office.

| Apr 25, 2013

Colorado State University, DLR Group team to study 12 high-performance schools

DLR Group and the Institute for the Built Environment at Colorado State University have collaborated on a research project to evaluate the effect of green school design on occupants and long-term building performance.

| Apr 24, 2013

More positive momentum for Architecture Billings Index

All regions and building sectors continue to report positive business conditions

| Apr 24, 2013

North Carolina bill would ban green rating systems that put state lumber industry at disadvantage

North Carolina lawmakers have introduced state legislation that would restrict the use of national green building rating programs, including LEED, on public projects.

| Apr 24, 2013

Los Angeles may add cool roofs to its building code

Los Angeles Mayor Antonio Villaraigosa wants cool roofs added to the city’s building code. He is also asking the Department of Water and Power (LADWP) to create incentives that make it financially attractive for homeowners to install cool roofs.

| Apr 23, 2013

Building material innovation: Concrete cloth simplifies difficult pours

Milliken recently debuted a flexible fabric that allows for concrete installations on slopes, in water, and in other hard to reach places—without the need for molds or mixing.

| Apr 23, 2013

Architects to MoMA: Don't destroy Williams/Tsien project

Richard Meier, Thom Mayne, Steven Holl, Hugh Hardy and Robert A.M. Stern are among the prominent architects who on Monday called for the Museum of Modern Art to reconsider its decision to demolish the former home of the American Folk Art Museum.

| Apr 22, 2013

Top 10 green building projects for 2013 [slideshow]

The AIA's Committee on the Environment selected its top ten examples of sustainable architecture and green design solutions that protect and enhance the environment.

boombox1
boombox2
native1

More In Category


Urban Planning

Bridging the gap: How early architect involvement can revolutionize a city’s capital improvement plans

Capital Improvement Plans (CIPs) typically span three to five years and outline future city projects and their costs. While they set the stage, the design and construction of these projects often extend beyond the CIP window, leading to a disconnect between the initial budget and evolving project scope. This can result in financial shortfalls, forcing cities to cut back on critical project features.



Libraries

Reasons to reinvent the Midcentury academic library

DLR Group's Interior Design Leader Gretchen Holy, Assoc. IIDA, shares the idea that a designer's responsibility to embrace a library’s history, respect its past, and create an environment that will serve student populations for the next 100 years.

halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021