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 5, 2013

Bangkok gets a leaning tower, that may topple

A seven-story apartment tower under construction in Bangkok has started to tilt and is on the verge of toppling.

| Apr 5, 2013

Snøhetta design creates groundbreaking high-tech library for NCSU

The new Hunt Library at North Carolina State University, Raleigh, incorporates advanced building features, including a five-story robotic bookBot automatic retrieval system that holds 2 million volumes in reduced space.

| Apr 5, 2013

'My BIM journey' – 6 lessons from a BIM/VDC expert

Gensler's Jared Krieger offers important tips and advice for managing complex BIM/VDC-driven projects.

| Apr 5, 2013

Commercial greenhouse will top new Whole Foods store in Brooklyn

Whole Foods and partner Gotham Greens will create a 20,000-sf greenhouse atop one of the retailer's Brooklyn supermarkets. Expected to open this fall, the facility will supply produce to nine Whole Foods stores in metro New York City.

| Apr 5, 2013

Projected cost for Apple's Campus 2 balloons to $5 billion

Campus 2, Apple Inc.'s proposed ring-shaped office facility in Cupertino, Calif., could cost $5 billion to build, according to a report by Bloomberg.

| Apr 5, 2013

Extreme LEGO: Wondrous micro city built out of 200,000 blocks

Master LEGO builder Mike Doyle unveils his latest creation, an out-of-this-world micro city that celebrates peaceful alien contact.

| Apr 3, 2013

AIA CES class: Sealant repairs that last – hybrid sealants for building restoration

It is hard to talk about restoration without talking about sustainability. This two-hour interactive online course discusses the role that restoration can and does play in the arena of sustainability, and specifically the role that sealants play in sustainable design and repair.

| Apr 3, 2013

Construction spending up 20% since 2011, growth will continue, says Gilbane report

The monthly rate of construction spending is up 20% in 24 months and increased in 18 of the last 24 months, which is a good leading indicator for new construction work in Q3-Q4 2013, according to Gilbane's latest Market Conditions in Construction report.

| Apr 3, 2013

5 award-winning modular buildings

The Modular Building Institute recently revealed the winners of its annual Awards of Distinction contest. There were 42 winners in all across six categories. Here are five projects that caught our eye.

| Apr 2, 2013

6 lobby design tips

If you do hotels, schools, student unions, office buildings, performing arts centers, transportation facilities, or any structure with a lobby, here are six principles from healthcare lobby design that make for happier users—and more satisfied owners.

boombox1
boombox2
native1

More In Category




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