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
Giants 400 | Feb 3, 2023
Top Workplace/Interior Fitout Architecture, Engineering, and Construction Firms for 2022
Gensler, Interior Architects, AECOM, STO Building Group, and CBRE top the ranking of the nation's largest workplace/interior fitout architecture, engineering, and construction firms, as reported in Building Design+Construction's 2022 Giants 400 Report.
Multifamily Housing | Feb 3, 2023
HUD unveils report to help multifamily housing developers overcome barriers to offsite construction
The U.S. Department of Housing and Urban Development, in partnership with the National Institute of Building Sciences and MOD X, has released the Offsite Construction for Housing: Research Roadmap, a strategic report that presents the key knowledge gaps and research needs to overcome the barriers and challenges to offsite construction.
Steel Buildings | Feb 3, 2023
Top 10 structural steel building projects for 2023
A Mies van der Rohe-designed art and architecture school at Indiana University and Morphosis Architects' Orange County Museum of Art in Costa Mesa, Calif., are among 10 projects to win IDEAS² Awards from the American Institute of Steel Construction.
Multifamily Housing | Feb 2, 2023
St. Louis’s first transit-oriented multifamily development opens in historic Skinker DeBaliviere neighborhood
St. Louis’s first major transit-oriented, multi-family development recently opened with 287 apartments available for rent. The $71 million Expo at Forest Park project includes a network of pathways to accommodate many modes of transportation including ride share, the region’s Metro Transit system, a trolley line, pedestrian traffic, automobiles, and bike traffic on the 7-mile St. Vincent Greenway Trail.
Giants 400 | Feb 2, 2023
2022 Convention Center Sector Giants: Top architecture, engineering, and construction firms in the U.S. convention and conference facilities sector
Clark Group, EUA, KPFF, Populous, TVS, and Walter P Moore top BD+C's rankings of the nation's largest convention and conference facilities architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.
Multifamily Housing | Feb 1, 2023
Step(1) housing: A new approach to sheltering unhoused people in Redwood City, Calif.
A novel solution to homelessness will open soon in Redwood City, Calif. The compact residential campus employs modular units to create individual sleeping units, most with private bathrooms. The 240 units of housing will be accompanied by shared services and community spaces. Instead of the congregate dorm-style shelters found in many U.S. cities, this approach gives each resident a private, lockable, conditioned sleeping space.
Codes and Standards | Feb 1, 2023
New Jersey to allow private firms to conduct construction inspections
New Jersey recently passed a law that will allow towns to supplement construction code enforcement with help from the private sector. The legislation, which received bipartisan support, also allows municipalities to enter into shared service agreements with neighboring towns for construction inspections.
Sports and Recreational Facilities | Feb 1, 2023
University of Houston opens 'game changer' wellness center at downtown campus
The University of Houston-Downtown (UHD) recently opened its new Wellness & Success Center (WSC). The $39 million, 75,000 sf facility greatly improves the quality of the school’s exercise programs and areas dedicated to them. It also establishes a dynamic core and recognizable landmark for fostering and nurturing an on-campus community, according to a news release from SmithGroup, which designed the building along with HarrisonKornberg Architects.
Giants 400 | Feb 1, 2023
2022 Cultural Facilities Giants: Top architecture, engineering, and construction firms in the U.S. cultural facilities sector
Populous, DLR Group, KPFF, Arup, and Turner Construction head BD+C's rankings of the nation's largest cultural facilities sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report. Building types include museums, public libraries, performing arts centers, and concert venues.
Giants 400 | Jan 31, 2023
2022 Retail Giants: Top architecture, engineering, and construction firms in the U.S. retail building sector
Gensler, CallisonRTKL, Kimley-Horn, Henderson Engineers, Whiting-Turner Contracting, and Turner Construction top BD+C's rankings of the nation's largest retail sector architecture, engineering, and construction firms, as reported in the 2022 Giants 400 Report.