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
Arenas | Feb 23, 2023
Using data to design the sports venue of the future
Former video game developer Abe Stein and HOK's Bill Johnson discuss how to use data to design stadiums and arenas that keep fans engaged and eager to return.
Museums | Feb 22, 2023
David Chipperfield's 'subterranean' design wins competition for National Archaeological Museum in Athens
Berlin-based David Chipperfield Architects was selected as the winner of the design competition for the new National Archaeological Museum in Athens. The project will modernize and expand the original neoclassical museum designed by Ludwig Lange and Ernst Ziller (1866-1874) with new spaces that follow the existing topography of the site. It will add approximately 20,000 sm of space to the existing museum, as well as a rooftop park that will be open to the public.
Multifamily Housing | Feb 21, 2023
Watch: DBA Architects' Bryan Moore talks micro communities and the benefits of walkable neighborhoods
What is a micro-community? Where are they most prevalent? What’s the future for micro communities? These questions (and more) addressed by Bryan Moore, President and CEO of DBA Architects.
Healthcare Facilities | Feb 21, 2023
Cleveland's Glick Center hospital anchors neighborhood revitalization
The newly opened MetroHealth Glick Center in Cleveland, a replacement acute care hospital for MetroHealth, is the centerpiece of a neighborhood revitalization. The eleven-story structure is located within a ‘hospital-in-a-park’ setting that will provide a bucolic space to the community where public green space is lacking. It will connect patients, visitors, and staff to the emotional and physical benefits of nature.
Multifamily Housing | Feb 21, 2023
Multifamily housing investors favoring properties in the Sun Belt
Multifamily housing investors are gravitating toward Sun Belt markets with strong job and population growth, according to new research from Yardi Matrix. Despite a sharp second-half slowdown, last year’s nationwide $187 billion transaction volume was the second-highest annual total ever.
Multifamily Housing | Feb 21, 2023
New multifamily housing and mixed-use buildings in Portland, Ore., must be ready for electric vehicle charging
The Portland, Ore., City Council recently voted unanimously to require all new residential and mixed-use buildings to be ready for electric vehicle charging. The move amends Portland’s zoning laws to require all new multi-dwelling and mixed-use development of five or more units with onsite parking to provide electric vehicle charging infrastructure.
K-12 Schools | Feb 18, 2023
Atlanta suburb opens $85 million serpentine-shaped high school designed by Perkins&Will
In Ellenwood, Ga., a southeast suburb of Atlanta, Perkins and Will has partnered with Clayton County Public Schools and MEJA Construction to create a $85 million secondary school. Morrow High School, which opened in fall 2022, serves more than 2,200 students in Clayton County, a community with students from over 30 countries.
Museums | Feb 17, 2023
First Americans Museum uses design metaphors of natural elements to honor native worldview
First Americans Museum (FAM) in Oklahoma City honors the 39 tribes in Oklahoma today, reflecting their history through design metaphors of nature’s elements of earth, wind, water, and fire. The design concept includes multiple circles suggested by arcs, reflecting the native tradition of a circular worldview that encompasses the cycle of life, the seasons, and the rotation of the earth.
Architects | Feb 17, 2023
Architect of the Capitol fired by President Biden after strong bipartisan criticism
Architect of the Capitol J. Brett Blanton was let go this week following alleged abuse of authority, misuse of government property, and wasted taxpayer money.
High-rise Construction | Feb 15, 2023
Bjarke Ingels' 'leaning towers' concept wins Qianhai Prisma Towers design competition
A pair of sloped high-rises—a 300-meter residential tower and a 250-meter office tower—highlight the Qianhai Prisma Towers development in Qianhai, Shenzhen, China. BIG recently won the design competition for the project.